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Just be careful with your short Steve if you still are :-)

It’s a good point Canary

Rumour mill in the City we have had 3 new II’s on the THG Offer, which caused the 25% spike - is only rumours but makes sense

Maybe why we have support at 60p to 65p, we have moved up from the 55p when Kelso became involved

Premium listing RNS and we may see 75p as the next support level

As ASOS have experienced today, without a solid balance sheet insurance companies won’t provide full cover to their suppliers
SV Bank balance sheet shot through had to do an emergency raise yesterday

As we see more of this type of news it’s actually helpful for all stakeholders in THG, we need to be FCF + and show a plan to repay debt, we can’t keep borrowing money to fund intangible capex into Ingenuity otherwise it will cause problems for the Core business funding their business’s

Once the THG BoD sort out the funding of Ingenuity capex and decouple the risk from the Core operations then shareholder value will be realised and we enjoy a healthy rerate

The new CFO will be all over this and personally I am confident the BoD have a plan on how to raise the $$, everything pointing to USA listings , no chance THG can raise the money in U.K

Next month, reckon THG continue to strengthen the balance sheet

Premium listing
News on USA dual listings
Ingenuity funding plan
FCF + this Q1

https://www.reuters.com/business/finance/silicon-valley-bank-sell-stock-cope-with-cash-burn-2023-03-09/

https://www.drapersonline.com/news/credit-insurer-cuts-cover-for-asos-suppliers

Could have been worse at Wand, the sales team could have been working
‘5 days a week ‘

https://wandisco.com/news-events/blog/company/wandiscos-journey-to-a-4-day-work-week

Apparently one senior salesperson accounted for 60% of all sales

The sales didn’t exist

Almost £900M m/cap on suspension on £9M of actual revenue

Looks like a run on SVB could create contagion to other similar USA banks/ funds especially around crypto -doesn’t affect U.K. economy - but it may make the Fed pause

‘The British economy expanded 0.3% month-over-month in January of 2023, rebounding from a 0.5% contraction in December and beating market forecasts of a 0.1% rise. The services sector grew by 0.5%, after falling by 0.8% in December 2022, with the largest contributions coming from education, transport and storage, human health activities, and arts, entertainment and recreation activities, all of which have rebounded after falls in December 2022. Output in consumer-facing services grew by 0.3% after a fall of 1.2%. On the other hand, production output fell by 0.3%, following growth of 0.3% in December and the construction sector fell by 1.7% after being flat. Considering the three months to January, the GDP was flat. source: Office for National Statistic’

Assume they did list a division in USA

One option, THG distribute the shares in ‘ newco ‘ as per your holding in THG shares via a dividend in species, not saying they will straight away as they may hold for a period of time but it works technically
So take MM, he gets 20% of newco for example and of course retains his 20% of THG
as well
Of course there would be dilution in newco for any $money raised but looking at the valuation Dan Wagner secured it may not be material
Not sure on free float rules on Nasdaq though, there may need to be a percentage to create a market ?

It’s taxable as income not capital gain btw
Unless in a tax wrapper , ISA , Pension

Looks that way OSG

I think we will see dual listing USA in one way or another, with a high chance/ likely Ingenuity spin off to raise funds

Kando, if you can explain how THG fund the SaaS capex of £80M would like to know how you think it can be done ? This years EBITA is forecast £120M that’s what THG tell is the brokers average
Deduct the rent £20M , deduct restructuring On Demand and add the £20M losses
then deduct £60M finance costs

If you can show us how it’s done ?

If the URL is firewalled , gist
Dan Wagner raised $280M cash via SPAC as an example on a £2B valuation
and he has colourful track record at best

What would ingenuity command ?

https://spacfeed.com/dan-wagner-raises-funds-for-2bn-rezolve-spac-the-times

Think we can agree it looks highly likely Ingenuity is listed in the USA

If that’s the case it has to be a SPAC for regulatory compliance purposes ?
Can’t be any other way ?

Last time I checked there were 140 SPAC’s with serious cash sitting within them, if the sponsors don’t find a home for the $$$ they have to return to investors and they don’t get their fees

Ingenuity showing £2.2B to £3B revenue must look interesting ? Perfect timing with the splitting of the various THG business accounts

Would have been the BoD problem - fiduciary duties wise

Why it was a non Bid, we are paying £60M interest a year now
THG the company just couldn’t have paid the interest on an extra £1B maybe £1.5B
THG a would have had up to £2B of debt on last years EBITA of maybe £80M less rent £20M

Who would have rolled ? It would have been nuts to do so

The BoD made the right call - the only call

Personal view

We had a burst of share buying from new II’s and enjoyed a 25% bounce in a week, these guys won’t have bought in without some level of guidance , ie what’s permissible within a closed period, gives us some comfort, the CFO is doing a good job managing expectations.

Will the II,s top up as the price has come off ? Maybe who knows?

It’s all about being in position for us PI’s and have some exposure that your comfortable with and be ready for the Full Listing RNS and plans for USA listings
both are coming next month

We could get an out the blue RNS that pushes us up or shorts trim / other II’s buy in, or we could drift back to 60p? What we do know this is primed for the next leg up, patience required.

No prob Blert

Takes 26 weeks for full listing to complete

We don’t know when they have started the process though but we can guess it will run in line with the golden share

What it will do is put Shorts on notice - 1 pencil
posted 140M shares required look what happened last 7 days with just a fraction purchased

IF we have direction on dual listing alongside Ingenuity self funding the Shorts will head for the exit , don’t forget the index funds will need 5 %
The stock ain’t there ( 210M shares )

For us PI’s this is about having skin in the game and have patience for the above to
uncoil

A left field RNS be it a whale / whatever changes stuff of course but even without that we are looking good - that will just make it more fun for us longs

City chatter

Makes sense, CFO has been meeting II’s, ovs it’s close period but the market likes his approach

Put that to one side, big one for us PI’s is the Premium listing, that’s happening.

Can’t see the 75p without an RNS but it’s about being in position at this point - you wouldn’t want to be short without a 3:1 or similar long / short strategy at II a level
and I can’t see the Shorts doubling down

Premium listing coupled with Ingenuity self funded crushes the shorts, why I think this next leg is about being in position (today )

Nb rumour mill in City

3 institutional investors have bought in, that caused the spike

Plausible

Premium listing - in the bag
CFO already told II’s

USA dual listings, ditto

Ingenuity external funding ,this is the one, unlocks the value by default in Beauty/ Nutrition
Moulding has it in him to find a solution.

We don’t rerate without it but the BoD ain’t daft, they know that to, as such I think it will happen, in the grand scheme of things of what MM has achieved in his career it’s doable, faith in the big he will deliver

Can’t see 75p Friday - not going to happen without RNS - but we have moved from 55p support to circa 65p and next jump could be decent on that RNS

Stockbroker

Who over 30 has TikTok never mind uses it?

Suggest MM knows exactly how this works, he’s built the 2 largest online D2C platforms in beauty and Nutrition in the world generating £2B, not in one industry but two

That’s some CV - respect to MM

The market now has grown ups on the BoD like Lord Allen and the new CFO