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Mik3y, you are clutching at straws. There are any number of reasons why he might choose to stay silent. He might even be doing it as a favour for friends - we have no way of knowing. All we can do as investors is assess facts and evidence. Easyjet is overvalued at the moment in any case, since its current share price and market cap do not reflect its debt and profit uncertainty. The shareprice is at a similar level in terms of market capitalisation as it was in the halcyon pre-covid days. easyjet will not be bargain until it gets below £3, and even then competitors might choose to see it go broke and buy up assets in a firesale rather than buy the entire concern. That is a pessimistic assessment, but let's see what the next few weeks bring.
Hexam, the share price and the number of shares define the market capitalisation (the value of the company expressed by its share price). Back in Jan 2020, EZJ's market capitalisation was approximately 377.3m shares times £15, making a market cap of about £5.6bn.
Today we have 758,149,619 shares, slightly more than twice as many in Jan 2020 and the share price yesterday hit £7.22. That made a market capitalisation of nearly £5.5bn, very nearly the value of the company in terms of its share price that was achieved back in Jan 2020. I hope that helps you understand the share price.
M1k3y; there have been NO ACTUAL BIDS for easyjet. That idea was a smokescreen probably inspired by cunning underwriters and management and promoted throughout this process. IF the managers of a company receive an offer to buy the company, THEY ARE OBLIGED TO TELL THE OWNERS OF THE COMPANY (the shareholders) so that the owners of the company can consider the bid. The directors of the company are the paid professional managers of the business; they do not own the business. The so called 'offer' from whizz was not put in front of shareholders because it was not a genuine bid. It might have been a phone call for all we know, or a conversation over lunch.
It is dishonest and a bit desperate to try to have it both ways, saying it wasn't a bid, so shareholders didn't need to see it, but it was a bid because easyjet with all its debt and empty aircraft is such an attractive 'bid target'. easyjet is no such thing. It is a loss-making enterprise fighting for survival in a market which is very difficult at the moment. Even after covid has subsided, we will find that flying has changed permanently, costs will be higher and customer volumes will almost certainly be lower, perhaps for a decade or more. That is what people in the industry are saying. DYOR.
Hexam, the share price and the number of shares define the market capitalisation (the value of the company expressed by its share price). Back in Jan 2020, EZJ's market capitalisation was approximately 377.3m shares times £15, making a market cap of about £5.6bn.
Today we have 758,149,619 shares, slightly more than twice as many in Jan 2020 and the share price yesterday hit £7.22. That made a market capitalisation of nearly £5.5bn, very nearly the value of the company in terms of its share price that was achieved back in Jan 2020. I hope that helps you understand the share price.
M1k3y; there have been NO ACTUAL BIDS for easyjet. That idea was a smokescreen probably inspired by cunning underwriters and management and promoted throughout this process. IF the managers of a company receive an offer to buy the company, THEY ARE OBLIGED TO TELL THE OWNERS OF THE COMPANY (the shareholders) so that the owners of the company can consider the bid. The directors of the company are the paid professional managers of the business; they do not own the business. The so called 'offer' from whizz was not put in front of shareholders because it was not a genuine bid. It might have been a phone call for all we know, or a conversation over lunch.
It is dishonest and a bit desperate to try to have it both ways, saying it wasn't a bid, so shareholders didn't need to see it, but it was a bid because easyjet with all its debt and empty aircraft is such an attractive 'bid target'. easyjet is no such thing. It is a loss-making enterprise fighting for survival in a market which is very difficult at the moment. Even after covid has subsided, we will find that flying has changed permanently, costs will be higher and customer volumes will almost certainly be lower, perhaps for a decade or more. That is what people in the industry are saying. DYOR.
People here seem to be very confused about the price changes affecting this share. Firstly, you should all realise that it will NOT be going to 900p because that would be the equivalent of the share price back in January 2020 being £18 (it peaked at £15). Back in Jan 2020, almost no one had heard of Covid-19, easyjet had low debt and full aeroplanes, and you could walk into pretty much any semi-civilised country with a UK passport and not much else. £15 was a highpoint. Since then easyjet has DOUBLED its number of shares in TWO rights issues.
Hitting £7.20 yesterday was amazing, because that was like returning to a pre-covid price of £14.40 (2 x £7.20 because twice as many shares in issue) and only 4% below the peak price 21 months ago. Today easyjet faces a lot of headwinds; read the rights issue prospectus and the last set of results to see what they are. Some of the headlines are losing £40m a week and net debt now at £3bn. The RI will knock a billion off that, but that still leaves £2bn. Back in Jan 2020 it was just £300m (normal level of debt).
Also, there is massive uncertainty about easyjet's future earnings. Look at the FCO's guidance for going to and returning from any country, even European ones. There are time consuming tests, evidence letters and even the prospect of quarantine. On top of all that, the cost of jet fuel has doubled in a year. Interest rates are about to go up. Winter is coming and covid case numbers and deaths are likely to go up, while business travel has been proven to be unnecessary in a lot of cases (though not all, obviously) and much more expensive than zoom meetings.
£7.22 will, I think, prove to be a highpoint for the shareprice. I expect the fizz to fade, now that the RI underwriters are no longer punting the shares to their customers. They've done their job, been paid their fee, and made about £58m this morning selling the leftover RI shares (the 7%) to their mug punters who saw the £7.09 closing price yesterday, grabbed the shares at £6.90 this morning and attempted to unload them for a quick profit as quickly as possible. I expect the shares to sink slowly over coming weeks to below £5.
There will be no divi. The business has made substantial losses. But hats off to the management and underwriters today on the current share price. Earlier this morning the sp hit 122p and it might even get back there again today. With the new shares that gives a market capitalisation of £5.33bn. Prior to covid towards the end of 2019, the market cap hit a peak of £5.6bn. The price recovery over the last week means the sp is at 95% of that price, basically a full recovery.
But the business now has over £2bn in debt and has taken big losses. Clearly the price has been pumped, because the business recovery is unproven so far, and could well turn out like the UK's hospitality industry, which is struggling to return to profit despite all restrictions coming off. This feels to me like momentary excitement and an sp that could fall steeply once the pumping is over, maybe starting tomorrow when the underwriters get a headstart on selling the rump placing on the market while PIs wait for their brokers to make their new shares tradeable.
A negative view, but keep in mind covid hasn't gone away, nor has EZJ's debts, and losses of £40m a week for the last six months might reduce, but there will still be losses, especially if UK covid related deaths hit 200 a day. DYOR. GLA.
I've been watching and am thinking about a short too. This piece from DanVanDamme on one of the other boards raises an interesting perspective: "The price action here is fascinating. Immediately prior to the last rights issue in June 2020, the number of EZJ shares was approx 377,347,727. After this latest rights issue, the number will be 738,149,619 - almost double the number of shares in January 2020 BEFORE covid hit and when EZJ's shareprice peaked at around £15. Halving that pre-covid shareprice to reflect twice as many shares in issue would give us 750p. We are at 680p, essentially less than 10% below the peak in January 2020, which was also before EZJ took on a huge amount of debt and spent assets on redundancy, mothballing etc and before the travel market took any kind of systemic hit (such as business travellers not travelling so much because of a permanent change in behaviours by switching to video-conferencing instead of in-person meetings). That is an amazing recovery, especially when you consider that travel has not actually resumed to anything like the previous level of business. I doubt that the shareprice is sustainable at this level, and it might even be termed 'irrational exuberance'. "
Net debt was £310m last year. Now it's net cash of £3m. Net debt has been wiped out. You're looking at average monthly debt, which is 11 months at £450m and then one month at £100m.
Complete turnaround. Cash generation of £94m and profit margins up in every sector of the business. The business has net cash of £3m!!
MGNS is the epic abbreviation for Morgan Sindall, a peer of Kier. MGNS gave a trading update last week - good numbers across the board, which is also good news for the sector. As for selling up, a lot of PIs may have done that. I'm sitting tight. September will see the next action but we might rise slowly into that. Shame that Davies and Kesterton didn't spell out the new numbers explicitly - it would have created an exciting week or two. This way, the analysts get to re-appraise Kier in their own time.
Hinkley has been outed on another board as wallywoo, a disgruntled amateur who lost money on Interserve and then tried to short Kier, thinking that all troubled construction have to go bust. He has apparently lost money twice, long and short, zigging when he should've zagged. Now he's just an enraged troll throwing shyte around on any Kier thread.
Let's not get distracted from the fact that Kier has made a 3% margin on £3.4bn and recapitalised the business. Kier management have raised the margin over the last four quarters and tend to downplay achievements, though CEO Davies has given an interview to Building this week, telling how he has fixed Kier's issues. Forecast earnings are about £150m with 30% to be paid out in dividends, explicitly promised in the cash raise prospectus. A re-rate is on the cards here for September when the full numbers are out. Meantime, insti buyers are likely keep the sp heading in the right direction. DYOR.
Now who can argue with that? I think we're all indebted to Namby Sandanby for clearly stating what needed to be said. I'm particularly glad that the lovely children on this thread here are able to read that speech. Not only is it authentic nutter gibberish, it expresses a courage little seen in this day and age.
Anyway, looking fwd to the full results in September. 3% on £3.3bn is about £100m, plus £330m cash raised, so could be we're at net cash already and average monthly debt will be minimal by historical standards. Sp seems to have found a floor at 125p - should climb from here I reckon.
snoopknob, look again at the JVs. Kier is still building plenty of residential. The Twickenham Gateway development is about 120 apartments on its own. They've got a few developments like that one plus other partnerships.
I'm expecting your doom-mongering to be as accurate as all of your other predictions on here, ie 100% wrong. What's more likely is exactly more of what we've seen since October last year - continuing recovery of the KIE shareprice. The firm has got £330m in cash, lower financing costs and it's been a record six months for housebuilders. KIE JVs will be contributing profits like never before. Guy Hands will be paying for Kier Living working capital too. Also a big ticket sale for the Solum partnership reported recently - two thirds of the Twickenham Gateway development sold plus almost all of the apartments in the first third. KIE took a Solum divi last year of £3m+. This yr it'll be significantly more. Construction reporting record sales at sector level and record activity as the logjam of covid-blocked projects come through.
Trading update on the 13th. No more writedowns or restructuring. £9m profit reported for first half. Second will be substantially better. The market is not pricing it in yet. Anything over £35m will put a rocket under the shareprice. £2 in three weeks. I was right about this not going down after all the new shares went tradeable. Funds are hoovering them up. FTSE250 entry coming too. This has legs all the way into next year.
Yes, I saw that newbee. Do you reckon that means that they definitely closed it rather than went under the reportable threshold?
twocents, I really think you should get that humble pie down your neck before it becomes inedibly stale. You seemed very certain that I would be wrong about the price and that it wouldn't hold, but here we are a week later and about to break-out to a new high. As I think everyone can see, some big buyers are sucking up anything that weak hands will give them before the trading update in just less than 3 weeks time. PI shorters will be getting very nervous as will the Blackrock staffer who put a 1% short on Kier three weeks back. It's slipped under the radar when the new shares made it 0.3% but my guess is that it's still there. Breakout next week if not this afternoon imo. GLA DYOR.
How's that humble pie tasting twocents? Price holding up well so far and very interesting price action yesterday. A couple of million traded until the final couple of hours and then suddenly some big orders filled and the day's volume doubled in an hour. I'd say the MMs were patiently sucking up PI sales until they could fill those orders until in the final hour they grabbed what they could in a hurry to complete the orders and had to give higher prices. 15 trading days until the full-year trading update (13th July) and a transformed balance sheet. My guess for the 14th July: £2. All those 'happy bunnies' who sold yesterday for 114 will be rueful bunnies. I also hear there are a load of PIs trying to short. They will be burnt bunnies. Mid September when Kier is back in the FTSE250: £3.
One other thing - where are the shorters? Only Blackrock has opened a short, badly timed about 10 days ago from memory, and they've added to it twice, so now they have about 0.92% short and they are about 5% underwater already. Hedge funds have stayed away. Take a look at the price action on De La Rue when their shares went live. The shareprice spiked. It had already spiked once (massive almost four times intraday) on a good news announcement, but it spiked again smaller when the new shares became tradeable. If there are big buyers and PI shorters it could happen here too. There've been plenty of ppl on these message boards trying to get ppl to sell their shares, most likely because they are short. So far it hasn't worked. If there are shorts out there, they might be about to get burned. Maybe. DYOR.
twocents: We shall see. A couple of things tho. There seems to be something wrong with your caclulator - the shares were discounted to 85p and today's price is 121p, which is a 42% premium, not 71%. Also, you seem to have missed the point that I was making (one of them) - IF kier has found a long term investor for the firm placing (121m shares) they will not be selling tomorrow. The other major holders have been holding since £7, so they don't necessarily have an incentive to sell yet. The PIs are the likely sellers, and they may have mostly sold now. May have. They are a small group and account for about 70m of the new shares and have been selling for a fortnight. A relevant question is, who is buying? What about the rest of the investment community which didn't own Kier cos it looked like it might go bust? Now Kier's future is safe, they are interested buyers. Jupiter asset management just picked up 10m shares on the open market. This week. So yes, some PIs might still sell their shares cheap, but there might be a lot of buyers. I am not telling people what to expect. But if the price doesn't drop, I've given a few reasons. Since you've told me to not expect the price to hold up, I expect you to eat humble pie if it does. ?? GLA and DYOR.
btw, ftse 250 is reshuffled in first week of September.