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A few people on here are telling smithy to shut up. Northscot is the one who needs to stop posting - of the two of them, at least smithy is right! The people posting unrealistically optimistic rubbish on here are attempting to mislead private investors. A more honest conversation would involve actual facts instead of mindless insults and stupid comments like 'keep the faith' and 'up, up and away' and 'lol' and '700p by the end of the week'. Meanwhile the shareprice continues downward, now into the £5s with a trajectory which suggests it'll soon be in the £4s.
It should be OBVIOUS to everyone from the price action over the last few weeks that this share is heading down in a determined manner. Easyjet have announced new losses of over a billion and when the annual results are out in six weeks time, the full numbers will cause another drop in the sp. In the meantime, as I and others have predicted on here, the covid situation is getting worse going into winter. People taking comfort from the govt's announcement this evening should also remember how often govt has reversed its decisions.
Germany is seeing a similar spike in infections since its climate is closer to the UK's - as we go into winter, the colder weather will cause infections and deaths to increase in France and Spain. Many foreign governments will react and reimpose more restrictions. The action from Morocco today is an advance warning of things to come. Funny that northscot says that it doesn't matter because easyjet isn't making any money on that route. How does he know? And what other routes is easy not making money on? All of them? Most of them? The real relevance of the Morocco ban is that it means that other governments don't have to 'go first' in reimposing travel restrictions, and the UK's horrendous case count means that we are particularly vulnerable to 'red-listing' by other govts. If another country follows Morocco's example of banning UK travellers, the easyjet shareprice will take a massive dive. It could easily happen this month, but if it doesn't, just wait til we are at record-breaking case number in December.
On account of the massive number of posts on this thread, I may repost this message. GLA and DYOR.
northscot, I agree you have a wild imagination. Last week you were imagining 700p by the weekend, then 700p by the month end, maybe you should try 'by the end of the decade' but even then I think you'll be miles off. This is heading to sub-£4 most likely by year-end if not earlier. Please stop misleading people with your baseless ramping.
Nothing has changed here; business customers will not be returning to short haul in anything like the same numbers as pre-covid, and profits will be very much lower than pre-covid due to lower customer numbers and higher costs. I see the share price continuing to drift lower now -- down trend seems to be establishing itself. GLA and DYOR.
northscot, I see from your tone and language that you are a novice, hoping to be taken seriously on this free chatboard. Yesterday you were very rude and aggressive. Today the facts are making you look ridiculous. You say up, up, up, while the shareprice is going down, down, down. A little more adjustment to your thinking is required imv. I will leave it to smithy to continue skewering you for the rest of the day. GLA.
Here's a nice summary of easyjet's situation, from one of the other boards:
Grim trading update, as expected. In the EU easyjet has been managing an approx 80% load factor where entry/exit barriers have been much lower, but despite that, is still loss-making. There are some huge headwinds ahead.
Interest rates: easy has a €300m loan coming up for renewal but interest rates are expected to rise. Currently EZJ's bond rate is very low. When rates go up, there'll be another hit to the finances and the losses will be getting bigger again.
Fuel costs: heading upwards and easy only partially hedged. Another hit to finances.
Consumer spending: inflation is already hitting households, especially on the basics of heating and power, food and transport. Higher spending on basics means lower spending on holidays; one holiday instead of two; a staycation instead of travel abroad.
Covid: it seems it just won't go away no matter what we do! The winter season forces people inside and the impact is already being seen in chilly Britain where cases hit 40 thousand plus yesterday. Inevitably higher deaths will follow. Will other countries continue to welcome UK tourists with minimal testing/quarantining? It'll only take one nation to regress to stricter entry/exit rules and there'll be a big shockwave through aviation at the prospect of other nations following suit. If the UK experience (more covid) is mirrored in Germany and France, it'll be an even bigger hit.
Wage inflation: everywhere you look, people are demanding higher wages, partly because of higher living costs. I imagine the pilots won't be agitating for more since they'll be happy to have ANY work and there's no shortage of them currently, but almost everyone else in the service chain from cleaners to baggage handlers to the tug drivers who tow the planes off the stands, bus drivers and so on are finding competition for their labour outside aviation.
Competition in a shrinking market: BA seems intent on re-establishing short-haul from Gatwick, Ryanair is as ever constantly punching EZJ in the gut, and other budget carriers (eg Whizzair) continue to snatch at the same market. An intensifying fight for customers limits EZJ's opportunity to pass costs onto its customers.
By my estimation, there's only one way for the shareprice to go, especially since it's still very high with a market cap not far from the Jan 2020 peak when everything was hunky dory in Europe and covid was an obscure Chinese illness. GLA.
You're no different to a broker? I think you have delusions of grandeur. You're posting a free chatboard and getting roundly ridiculed for every post you write.
So in the cold light of day, it seems northscot is feeling a little less ****y. Hard to argue when the shareprice is diving for the floor. That 700p is looking a long way off now and I suspect will be probably never come about, let alone by Friday. If you do a little reading northscot, you might find out why.
More heat than light on here recently. It's understandable that people with a long position wish that people with a short position or a negative view don't make their views known, but that is half the fun of the free chatboard. What EVERYONE should remember is that this site is for private investors, not the wealthy market insiders like Goldman Sachs, who will sell dud rights issue shares by the million to mug punters so that they can pocket big fees and trading huge profits.
Anyone here clutching at a tiny uptick in the shareprice and saying this is an indication of the future direction, is performing an act of desperation. The same is true of the wanton abuse on here. None of it makes any difference to the shareprice.
The reality, as I have said before, is that easy is loss-making currently and will find it very hard to achieve profitability in the short-term. Today the market has begun to see that. I think there will doubtless be more share-pumping from investment professionals while they clear their own easyjet positions and then we will see more dramatic declines over the coming weeks, especially as the economic situation deteriorates in Europe/UK this winter. GLA and DYOR.
Totally accept things are improving malpasso, but improving from 20 feet underwater to only 10 feet underwater is still drowning. My message to the optimists here is that the profits of 2017, 2018, 2019 are not coming back. The loss of many, many business travellers is permanent. Zoom and skype are the norm now for meetings. If you were an employer, would you honestly pay a dozen of your employees to travel by air, stay in a hotel, and pay them for all the time they were travelling, just so that they can have a three-hour meeting which they could now do on zoom? We are talking thousands of pounds in savings for one meeting. Things have changed permanently.
If you were a former easyjet customer, but now you're not so sure that your job will continue, and you have fond memories of Barcelona, but you know that there are loads of face-mask nazis out there and you're unsure and uncomfortable with all the local rules, and you can't even see people and communicate with them properly when they and you are behind a mask, you know that the holiday experience has changed. Some people will still go, but many will not. Some people don't like the idea of getting seriously ill in a foreign country. Eventually these issues will fade away, but travel habits have been broken. I think it will take a very long time for customer volumes to get back to 2019, and so do senior execs in the industry (eg Heathrow chief exec).
Booking a seat at say 3am for an early morning departure will show you how many seats are vacant when you come to book your seat option (and price). Very few people will be making a decision in the middle of the night to fly at 8am, so you can get a good idea of the empty seats just from looking at availability.
One major flaw in YOUR supposition is that your argument applies to ALL people who might have previously used easyjet. The market is already well served my many other low cost airlines and it only needs a small reduction in overall volume to create a massive profit impact on easyjet, as we have seen.
Easy may well return to profit sometime, perhaps next year, but it will be a much much smaller profit than the pre-covid days, and small profits will make it very hard for easy to clear its debts and return to dividend payments. I think it will require a THIRD rights issue after covid has faded, perhaps next year, to clear the debt burden and recapitalise the business.
Don't forget, even the founder of this business has a very negative view and refused to support the rights issue, preferring instead to reduce his family's stake. Goldman Sachs is selling off the 18 million shares which it picked up from the rump placing. The smart money is leaving easyjet. The mug private investors are being lured in by 'analysts' and others pumping the shares so that we can take the hit down to £4 and perhaps even further. Next year, during the hard slog to recovery, I feel sure another rights issue will be the only way to quickly clear debt, and since interest rates are going to rise, that might become an urgent issue. At that point, £4 will become £2.
This site is for us private investors, not the Goldman Sachs smart money and the rich autocrats like Stelios and co; we share our knowledge to help each other (ideally), so please consider what I'm saying objectively. This share will be supported institutionally until the rump shares are sold and then there will be a vertiginous fall. Don't let private investor money get sucked out by the vampire squid and its friends.
steve72, you are a well known troll on here and everyone is aware of your agenda. As you are well aware, Kier has no net debt - it has NET CASH.
Regarding housebuilding, Kier is no longer a housebuilder as it has sold Kier Living, its housebuilding division. Kier's business is regional construction for local authorities including port developments and regeneration projects, schools and the NHS, roads and highways maintenance, coastal defences, infrastructure, housing maintenance and some limited partnerships in residential flats (mainly urban regeneration). Kier's work is focused primarily on INFRASTRUCTURE and aligns with government's commitment to 'level up' regional areas (where Kier already has a strong commercial presence). Most of Kier's projects are essential as opposed to the discretionary and speculative nature of companies working on private sector contracts.
Small construction businesses fail every month, every year. Kier is a large business with a 50-year history. 80% of its work is already contracted under government backed contracts and the firm has many hundreds of projects ongoing throughout the UK right now. You do not have to worry about Kier, but some of its smaller competitors might founder. That will only increase Kier's market dominance as a dependable contractor in a shrinking pool of available suppliers.
The vast majority of people seem to be missing a key point; at £7, the easyjet shareprice is very close to its peak price two years ago of £15 with half as many shares. The shareprice has recovered, but has easyjet recovered to where it was at £15 in Jan 2020 before covid hit? No, of course it hasn't and it'll be many years before it does.
In 2019, easyjet was making £350m in profit and paying a dividend and only had net debt of £300m. Now the business is loss-making and will likely not return to profit for at least a year and possibly much longer, and profits when they return will almost certainly be much smaller because of higher costs and lower customer volumes. When the trading update is issued in a few weeks and the annual report at the end of November, shareholders will get a reality-check - losses will be enormous. easyjet has £2bn in debt, even after the rights issue cash has been thrown in, and will not pay a dividend for several years, and possibly many years.
As for load factors, take a look at the flights taking off in a few hours from now. I just looked at two flights to popular destinations and both had 50 seats vacant out of 185 (a load factor of about 73% and close to what easy has been reporting). This continues to be a loss-making situation, but even if easy makes some profit, it will take years to pay down the current debts. The current shareprice doesn't reflect the low earning potential of the business over the foreseeable future. When shareholders confront the actual numbers later this month, I suspect the shareprice will take a big dive and we will eventually arrive at around £4.
Goldman Sachs is reducing its holding (see the RNS) and hedge funds are returning to short (see shorttracker). If you expect the shareprice to go up, all the signs that I'm seeing suggest shareholders will be disappointed. GLA and DYOR.
What a rise today. Everyone seems to be very excited about Australia opening up maybe next month, and only for Australian citizens, plus lots of testing and house-arrest... I mean quarantining. I didn't even realise that easyjet flew to Aus. Back in the day-to-day of practical travel, a friend told me about her older relative coming to the UK from Poland today. Apparently the UK is on Poland's amber list, because we have 30,000+ covid infections daily and about 150 people dying each day from covid related illness, so her relative has to get tested before flying, get tested two days after arriving, arrive at the airport an hour earlier than before so she can present all of the required documents, and if she can do it all again in reverse without catching covid, she'll be able to get back home. But the shares are now £7+ (93% of Jan 2020's market cap) so it seems that everything is fine for easyjet.
In other news, it seems that Goldman Sachs or its customers picked up almost the entire rump placing (6% of the 7% unbought shares) and the hedge funds closed much of their shorts at the top, while the ones remaining at less then 0.5% have dropped off the reportable listing because 0.5% of EZJ is now more like 0.3%. Where next? I'd say down, but next week we'll probably hear that Pitcairn Island has opened up its airspace and the whole market will ejaculate over EZJ and IAG again. DYOR and GLA.
Ahhhh hexam... we are nearly on the same page. Plus I do enjoy a laugh and your wry last line did make me laugh out loud.
If you have studied, then you will know that market cap is ultimately an expression of the market's PERCEPTION of value in a share. So, it is possible for a rights issue to raise cash for a company but even taking into account the dilution of value across a larger number of shares, AND the increase in cash assets, the share price can and often does uncouple from either or both of these, because it is not intrinsically linked to ANY hard value, merely a perception of value.
I understand what you think should be happening - that the individual share value is diluted, but this might be offset by increased asset value. However, I am going back to January 2020 and looking at the perception of value there against the assets and the earnings potential for easyjet pre-covid and contrasting it with the situation now, after this latest rights issue.
So, at the risk of repeating myself and boring anyone to death, let me say it very simply; the total share value of easyjet back in Jan 2020 was £5.6bn. Back then the business had a mere £300m in net debt and was earning around £400m in operating profits annually and paying out a dividend.
Today, two rights issues have poured money in, but massive costs have SPENT all of that money and more. Today the business has net debt of £2bn even after this latest rights issue, because over £1bn has been lost in the last 6 months (£40m a week). Shareholders seem to be excited by the prospects of recovery and this has been reflected in the rising share price which is now sitting a mere 9% below its Jan 2020 peak of £15 when expressed as the total share value (market cap) DESPITE THE LOSS OF ASSETS and the likelihood of ongoing losses. My perception is that recovery will take a long time. I am not alone in thinking this.
The simplest expression of the company's share price for comparative purposes is the market cap. The number of shares may go up or down, but when you total the value of the shares, you have the market's total perceived value of the company. I contend that that perception is temporarily skewed and will become aligned with the actual circumstances (high debt, no dividend for some years, potential ongoing losses despite more traffic, potential set-backs in the recovery due to winter infections) now that the excitement of the RI is over.
Today is year-end for easyjet. We will see a definitive set of figures two months from now, and I hope, an update/preview before then. The full set of figures will enable is to calculate the enterprise value. For now, market cap is a very useful comparator for gauging where the shareprice is sitting against historical values.
hexam; I thought this would be a really short conversation that would've ended three messages back with you saying 'oh, I understand now...' but no! I'm only persevering now because this has become momentarily amusing. Let me help you out with a little definition from a 'trusted source' investopedia.com [where it says 'dollar', please don't get hung up - just replace it with 'pounds']:
htTps://www.investopedia.com/terms/m/marketcapitalization.asp
What Is Market Capitalization?
Market capitalization refers to the total dollar market value of a company's outstanding shares of stock. Commonly referred to as "market cap," it is calculated by multiplying the total number of a company's outstanding shares by the current market price of one share.
As an example, a company with 10 million shares selling for $100 each would have a market cap of $1 billion. The investment community uses this figure to determine a company's size, as opposed to using sales or total asset figures. In an acquisition, the market cap is used to determine whether a takeover candidate represents a good value or not to the acquirer.
Okay... now that you know what market cap is, please look at the EZJ Rights Issue RNSs which state the new TOTAL number of shares for EZJ. I'll save you the trouble if you like; it is 758,101,025. Multiply that by £6.80 (tonight's closing price) and you should get approx £5.15bn for today's EZJ market cap.
The FT has updated its EZJ numbers on its equities market data pages (most sites haven't):
hTtps://markets.ft.com/data/equities/tearsheet/summary?s=EZJ:LSE
Their value is a fraction off, but possibly they are using the previous day's closing price rather than today's.
Now that you've got that under your belt, take a look at EZJ's RNS's for the number of shares in issue back in the first quarter of 2020. You should find a number around 377m. The share price in Jan 2020 came off a peak of £15. Multiply the figures and you should get approx £5.6bn. Today's £5.15bn market cap is about 91% of Jan 2020's market capitalisation for EZJ. Sorry if this totally upends your value system, but these are the facts.
As I've said numerous times, you are confusing 'enterprise value' with market cap. Because EZJ has lost perhaps a couple of billion and maybe more between Jan 2020 and now, you should factor this into any enterprise value calculation, along with reported loans, cash and cash raised recently. It might be safer to wait for the results in a few weeks to get the enterprise value. However, market cap we can get right now. : )
You are genuinely laugh out loud funny hexam. It's quite rare to find someone even on here who can't calculate market capitalisation, especially since I gave you all the numbers. As I said before, you are confusing market cap with 'enterprise value'. It is not a 'flaw in my logic'. Market cap is share price multiplied by the number of shares. There's nothing you can do about that chum. If you insist on not learning, you will be stuck in ignorance forever. My chosen title is an aid for shareholders attempting to protect their wealth btw.
hexam; very glad to see that you don't need to do any reading because you have a background in this kind of thing. The following should make perfect sense to you and, I hope, everyone else here.
The current share price is equivalent to more than 90% of the peak shareprice in the months before covid hit in January 2020 (ie £13.50). The calculation is very simple. Before the first rights issue in 2020 easyjet had 377,347,727 shares. This number multiplied by the share price in Jan 2020 comes to a market capitalisation (the share value of the entire company) of £5.66bn. Today, after two rights issues, there are 758,010,025 shares. At the current shareprice of £6.76 this comes to a market capitalisation of £5.12bn, which is 90% of Jan 2020's market cap.
If you think that the current prospects for the business warrant a mere 10% reduction on the 2020 peak share value, I would argue that you are not looking clearly at the business. Easyjet now has £2bn in debt, even after the cash raise money has been put against the losses for the last six months, and passenger volumes are likely to be much lower for the foreseeable future. The firm has taken a huge hit and it will take years to recover, especially if interest rates and customers take much longer to return to pre-covid level of traffic. That is what is happening in hospitality right now, here in the UK with all restrictions off.
Bad news comes in threes - I'm expecting a third rights issue eight months from now. DYOR.
Actually these boards are full of misguided optimists. I like to bring balance and perspective. I wonder if easyjet will be able to hire at their old rates. I hear wage inflation is a thing nowadays; furlough is ending but most people haven't stood still. I might look in tomorrow. Good night all.
hexam, this beginning to turn into a tutorial on share trading. I suggest you do some more reading. You are confusing share price and market capitalisation with enterprise value. Please look it up. And after you have, also please understand that easyjet has already lost over a billion pounds in value since it last reported results, due to a cash burn of £40m a week, much discussed on here and elsewhere. The enterprise value btw MIGHT be similar to what it was back in March (results are due in October I believe), but it's certainly a lot lower than it was in Jan 2020.