Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Next Monday. It won't be anything to do with Boohoo as a company but a wider market drop which will pull Boohoo down with it. I don't have a price target to get back into Boohoo, around 100-120 depending on how far it drops. It's a solid company with minimal debt and will do well buying out more distressed companies over the next couple of years. It's very risky to hold anything short term IMO. I went all cash in January/early Feb and have been selectively shorting. Currently short SP500, FTSE, gold and a few others.
The narrative that things will go completely back to normal in a few months is a lie. This global pandemic started from a single person in China and has infected the world, remember that. Recovery will be slow. We won't see 300+ again for another 18 months.
I just want to say thanks for all your warnings. I sold up many months ago after taking a huge loss here, which I, fortunately, managed to make back elsewhere. If I hadn't then I probably would've been forced to hold into suspension on the hope of them turning things around and lost a lot.
To others, it's unfortunate, I too believed in the potential of KOOVs, but sadly execution is what matters and KOOVS were lacking. You can't build a business selling shirts for £3 when you have execs taking millions in salaries combined. We were all in it for the high risk-high reward - on to the next opportunity.
I can't see how to create a new message on the new site layout.
Does anyone think this might be due for a pullback? I'm long on Boohoo in the long-term but think it's due a correction after it's incredible rise this month?
Anyone else feel the same way?
1) Explain how.
2) Yes
3) Only if they sell
FLF are buying new shares at a fixed price.
HT are receiving shares at either a variable price or fixed price.
Someone had too many cocktails at lunchtime... normally the share price manipulation is better hidden.
I can get quotes to sell shares in the 100s of thousands.
I can't even get a quote to buy 100k shares.
I think this will move upwards soon...
RE: Pascha's earlier post which has disappeared.
Didn't you also say exactly the same words last year?
It was before my time but I read back to your post history to then a few months ago. It was probably around this time last year?
I think the share price was around similar levels to now and you were saying Koovs would go to 2-3p and you were trying to spread fear again.
Then the share price went to 20p instead.
Did something like that happen?
I wonder if Pascha is hoping to do the same thing again and trying get the share price lower and buy more shares.
An inquisitive person might wonder why he doesn't spend more time warning shareholders of other companies and is so focused here.
To answer Pascha's question. I'm happy with the risk/reward on Koov. Last year they received funding for a five-year plan - they aren't even 12 months in. I'm happy to give them time to execute their plan, Koov is looking more promising now than ever before.
No one knows the burn rate, but I think it's likely Koovs has cash in the bank for another 5 months without issue.
FLF are clearly committed to our digital expertise, management, and brand. As evidenced by the 1.4m contract earlier this month.
I don't have the exact date of when Cover Story started being sold, but I'm sure someone else will - potentially Nov-Dec last year (they started with just a few products and didn't have them all for a long while IIRC). It's not very long, only this month was it announced we'd be working on a platform for FLF's other brands, the point is, we're at the early stages of a long strategic relationship. There is a five-year plan. FLF didn't invest 6 million into Koovs last year for them to run a three-month trial selling Cover Story on Koovs' platform.
Koovs started doing mass (YouTube) advertising in late January, once they had restocked their product range (which they were forced to cut back on as part of cost-cutting measures in 2018). They are continuing to push adverts out at an increased rate.
April, news will start to flow, possibly with a positive trading update as we'll see the impact of the advertising. This will get us as close as possible to 15p before May time, which we'll need to ensure the next tranche of shares HT Media are issued at as close to 15p as possible, and not 7p - all other Koovs holders benefit from the SP being as high as possible at this time, as it means we'll all be diluted less (this also includes FLF).
Instagram followers and tags are growing daily, the headline rate of 'xx followers' is less important, what is important is that Indian influencers and normal people are posting on IG daily, and more and more people are liking the posts, and scrolling through them they look legitimate and are growing in number. See for yourself: https://www.instagram.com/explore/tags/koovsxyou/
This is exactly how you grow a brand with Koovs' target audience. These are the young fashion-conscious shoppers who are our target market, and/or the people our target market look towards to determine what's fashionable.
As always, there's still risk. DYOR etc.
I don't want to become this board's new resident ramper, but it's not all doom and gloom.
Personally, my thoughts are that the deal may not come next week, but is likely to come by April.
The last RNS was a signal that both FLF and Koov are committed to this partnership. FLF are also committed enough to pay additional money to Koovs for services and this also helps to dispel any ideas that they're going not going to proceed with their second investment and try and 'pick up Koovs on the cheap'.
The lack of additional buyers simply comes down to the fact that most people who know about the fundraising are already in, or are waiting on the sidelines (and Brexit uncertainty definitely isn't helping at the moment, I'm guessing a lot of people and waiting to see what happens). Koovs needs some good sustained and positive news before more new people hear about it, and that's not going to come until after the fundraising and at that point, new investors will be going from 12p instead of from 7p.
I also feel that even if fundraising doesn't come in April, then we may get a buyout offer from FLF further down the line, as they're clearly seriously interested in what we have to offer in the online world.
RE: lack of buying, I agree, I’d like to see the opposite... but it was also the case last year before it spiked to 20p.
The SP is low at the moment, but let's not forget, the 150 day SMA is 9p and the 200 day just under 11p...
Personally, I'm happy to wait until April to see what happens with this, but then I'm investing in the company and not just trading. I feel like Koovs are preparing to start pumping out some good news to get the share price as high as possible before the start of May. It would also explain why they've been promoting their YouTube ads recently.
In answer to your question chancers...
Koovs are not buying shares on the open market, they are injecting cash into the business because both Koov and FLF know that Koovs needs cash to sustain their marketing and brand building operations, which are key for Koovs.
Koovs is part of FLF's online strategy to sell their premium brands (Cover Story & potentially others). Koovs is also going to run a platform for FLF's less premium brands in return for a fee. This will provide FLF with a sales channel for the brands not suited to Koovs.
For Koovs the deal is a way to raise the necesary capital to finance the brand building, one alternative would simply be to issue bonds, on which Koovs would pay interest on. However, both Koovs and FLF understand that they both would benefit far more from this partnership.
FLF see the value in Koovs far beyond 15p, and they understand that Koovs needs capital to get there. FLF are also gaining from Koovs online and digital expertise.
Forgetting all of that, and let's pretend FLF don't see any strategic benefit from a partnership, and instead they just want to buy just to illustrate why not just pay 7p.
Firstly, if FLF just went to buy 69 million shares from the market, Koovs wouldn’t get any additional cash, the seller of the shares would get the money, and Koovs would get nothing. FLF know that Koovs needs cash injections as part of Koovs’ 5 year strategy – which FLF were aware of when they bought the initial shares last year.
Secondly, assuming FLF just buy from the market. Koovs is an illiquid share. They might buy the first 5 million shares at 7.5p, but the next 5 million would cost 8.5p, the 5 million after that would be 9.5p, and so on. Once holders start to see what’s happening, the price will suddenly become 20p, because why would anyone sell at 10p when they can wait and sell at 15 or 20p?
I’m personally holding and I’m long Koovs, but if I wasn’t invested and on the fence, even if I didn’t go all in I’d start to build a position.
The results could've been better, but also could've been a lot worse, and judging by the short interest was expected to be a lot worse.
This is going to higher as the shorts start to close. I reckon 3600 in the next month easily.
Anyone have any thoughts on today's drop? Seems strange to drop so much today when the two largest short sellers AQR Capital Management, LLC and Marshall Wace LLP have been reducing their positions this week. Unless someone else has begun to increase theirs.
Anyone? Or just "Brexit uncertainty"?
This is a great piece of news today for Koovs. It’s the start of the synergies and efficiencies being realised from the partnership between FLF and Koovs.
Essentially, we’ll be using our technical know-how to help bring FLF’s range online which is relatively simple from a technical perspective as we already have the infrastructure and right people in place. It will help our balance sheet, and more importantly, it will help us get better efficiencies in distribution as FLF will have to build out their delivery network to fulfil Brand Factory online sales. As an added bonus for FLF, the Brand Factory website will also benefit from any learning and insight we gain from operating and optimizing the Koovs site.
Hopefully this will also convince some of the ‘less positive’ members of the board who seem to think Koovs are a charity case. FLF benefit by selling their premium brands on Koovs, and now we’re using our online expertise to help with their brands which aren’t suitable for Koovs. Our benefit is obviously coming from better manufacturing and distribution. There’s a reason FLF invested in us, and it’s because it’s a brilliant strategic partnership where we are both better off together. As I’ve said before, I wouldn’t be invested in Koovs they had just got funding last year – it’s the FLF partnership which convinced me.
Also, I agree with HH, “subject to necessary regulatory approvals or via an alternative structure, as may be permitted under the Indian Laws.” to me looks like there may have been some regulatory issues but both parties are committed to either working them out or finding a way around them.
FLF are well worth a bit of background reading for those with a serious interest in Koovs - particularly KB's retail 3.0 vision, and how we'll fit into it.
"subject to certain conditions" - did raise alarm bells for me, but then it was also stated on the previous round. Again, and deal I do is subject to certain conditions, they need to protect themselves.
I am well aware of confirmation bias, hence why I'm engaging with you to challenge my own opinion to make the best possible decision with what we know. Koovs isn't an easy sell, it's obviously risky, however, I think it's a risk worth taking and my other holdings have beaten the market, so I'm happy to take on some risk with Koovs.
Koovs is definitely not the best chance of making money, but I'm happy with the risk/reward ratio on it and I don't have time to be researching other companies at the moment - so I'm happy to hold.
"Even if KB does proceed, well it’s then a clear signal that he will take it over, again in which case he will want the best price for it, again in which case he’s hardly going to bust a nut to get it going and raise the share price.."
then why didn't he just do this last year when it was 5p? I agree, he's a savvy businessman, he held all the cards, and yet they didn't do it then. That's the gap in your plausible theory.
Also, as I work it out, he paid 6Mish for 16% - he's going to pay 10M for another 13% to take his share to 29.9%. That's not 5% for 10m, as you stated.
Also, using napkin maths, FLF put a 37m post-investment valuation on Koovs last year and a 73m post-investment valuation on Koovs for their second tranche. Now it could be that 'subject to their conditions' they decide it's not worth that at this moment in time. However, we all know that Koovs need the money, FLF included, and Koovs is FLF's route to online, so it may mean that they want a larger % which would mean a buyout offer.
Also, Koovs aren't the only ones who faced losses trying to sell clothes online. All retailers suffered due to demonetization. FLF understand this more than us, it's easy for us to look at a balance sheet and see huge losses, but all Indians lived the reality and understand the market conditions of that time.
If it was just about Biyani wanting to give Avni a toy, then they could spin up an app and advertise it in a couple of months, and on top of the management expertise that Koovs bring (...at least they'll be learning from their mistakes...) - it would take valuable time for Avni or whoever she brings in to run it, and they're just as likely to make their own mistakes, and would take away from her managing her food ventures.
Also, re: FLF having to do any heavy lifting. That's not true. All they're doing is signing a cheque and we're doing the heavy lifting to take FLF's brands online. FLF are well aware they have no expertise in this area and that's precisely why they have invested in Koovs.
Why would Keesh pay £10,000,000 for 5% more of Koov - it does seem awfully expensive.
Pascha - please show your workings of how you got 5%. What % of Koovs do FLF currently own? What % of Koovs will they own after their next subscription?
Thanks,
Ollie
Pascha was correct about Ruffer, but if someone says the sky is green, and Pascha says the sky is blue, it doesn't make him an oracle. The HT Media thing was quite obvious that we'd be paying them in addition to granting them shares. They are a business with running costs to pay, and they can't pay them in shares. As I'm sure the people on this board know (as you all seem to be business gurus - cash flow is important).
RE: Rob not buying any shares - He has over 6 million share options. He doesn't need to buy any more. It's a completely unnecessary risk to buy more shares in the company who employs you (especially when you already have options) - the risk-reward balance does not add up. He's already going to be set for life if Koov succeeds. Go and ask your IFA about buying shares in your company, and they'll advise against it and tell you to diversify.
Koovs, as we know, is still at risk - even if the risk is small. If this was already priced at £7 per share the opportunity would not be so great.
As I've asked before if FLF weren't planning on buying Koovs, why didn't they just buy it out last year when it was at 5p and seriously on its knees? There was no need to "play it out" - it was already played out.
Now we have plenty of cash in the bank, there is no sense of urgency, the sky is not falling (though it still could in the future).
All I'm seeing from HT Media and Rob is careful risk/reward management, which we should all be doing. Koovs isn't a sure thing, nor is it sure to fail. Personally, I give them a lot more than a 60% chance, or I'd have sold out by now.
Well said Matt, I believe the majority of us come here for useful discussion and sharing of facts, research and opinions. The nastiness and personal attacks make me think posters here are all a bunch of teenage girls; none of us actually care if you 'win points' over other posters on this board. We are here because we're invested in a company, not your drama.