The use of algorithms is definitely having a major effect on daily share price movements
You never used to get these almost daily movements of 2-3-4-5% as often as you do now... far more seismic vibrations in the share prices
The internet and the use of "speculation" and "rumour" and the tsunami of data and stats released ,have collectively turned the market into a psychological battle ground ....especially when the yields available elsewhere get lower
You really have to be nibble on your feet and have a definite game plan ....
The smashed Tullow Oil this morning over 25% drop
Every day almost, some poor share gets the cliff edge drop
The shorters are carved out of granite, not sandstone
They will just take the ebbs and flows of the daily mood and hold for the moment... same with Wood Group ....the macro environment has to give the signals
You also have to wonder whether a short position here is a hedge against long positions elsewhere
The market is acting like a seismograph at the moment, twitching to every piece of data and every piece of political comment ...this morning you have another comment from Trump and the seismograph needle flickers into action across entire sectors..
Mid November and nothing much is going to happen with Metro bank itself for the remainder of the year, I doubt.
The company will just tick over and as they have suggested Q4 is predicted to be similar performance to Q3
It is really a bet on the wider issues that the SP will adjust to...such as speculation about GE results, BOE interest rate move, Xmas spending data etc giving an idea of consumer behaviour, continual Brexit (linked to GE) etc ..... much of which is out of Metro's control...
The bank is looking at a 18-20p per share earnings for the year on an underlying business performance basis ( before non added other costs) which I guess gives a P/E (200/20) of 10 at 200p
Whatever the Trade Talks bring...Trump MUST be seen to have "won" and to have squeezed any compromises out of the Chinese... he wont have it that they have come to an agreement...it will about what HE has made the Chinese compromise
Putin and the Russians always give the opposite view to the media before any OPEC oil meeting as they hate the oil speculators and love to confuse the market before any OPEC decisions are made official.
Trump is no doubt doing the same....he is deliberately sending confusing messages to the market ( he loves the power that gives him) and keeping everyone guessing about the outcome of the talks which will or should be known very soon.
All this creates a lot of trading from buyers and sellers , making their decisions, and a lot of extra trading brings in more taxes
Until the macro situation improves, this wont...is my view ....at least it has ticked up off the lows and strongly bought on those levels...
And the market is waiting on the China-US trade talks ...everywhere there seems to be a measure of caution and delayed decision making
It needs the decision about the expansion plans and costings , which they said they wouldnt have until the EOY results...which is the end of February 2020, I think
" Metro Bank is further evaluating its future plans to balance growth, profitability and capital efficiency, the results of which will be communicated in conjunction with the full year results."
" this is not how hedge funds operates. if you think they are happy to waste money in borrowing fees I suggest you talk to your friend again and ask him the rationale of that."
Each to their own view....but can I suggest that you think through a few scenarios and then you may discover some where the rationale does in fact make sense ..
I have spoken to a guy at length who used to work at one of these Funds and he told me quite a lot about the behaviours and tactics etc of the shorter managers....it isnt always a case of borrow and immediately sell ...the reality isnt quite like that in many cases .....
" Hopefully the premises are already lined up and the new CEO has the sense to got the wheels in motion "
He will have only signed up if the decisions were made before he joined....IMO ...hit the floor running ASAP seems to be his requirement...the decision to get rid of the TM's must have been part of the pre-condition of joining
" A good telesales team will soon start to accumulate restaurant numbers."
what is the deal though....are these EXCLUSIVE contracts with a minimim contract period ? ..or can the restaurant use more than one APP company ( difficult to manage maybe ) and are they on a leave when I want type contract ? ...In other words what is the churn rate with all these restaurants changing from one App to another ??
1. The BOD have said they dont think there will be any improvement in Q4..
2. They arent committing to further expansion plans until at least the outcome of the election and of course Brexit and whether the election outcome effects any Brexit direction. UK economic growth of 0.1% over the last 6 months isnt exactly sparking inspiration for banks
3. The underlying business is making a small profit but the costs added to that arecurrently turning that underlying profit into a loss
4. The risks and costs againt the profit expectations are currently making them pause for thought
5. The market doesnt really care about book values or NAVs ...the market looks at ROCE and profitability using the assets
...the book value NAV only really become part of the story if indeed a takeover needed a valuation....and is this the right moment for a bank like Lloyds or even say Santander or any of the others for that matter to go poaching more customers ?? ..
1. A SHORT is where shares are borrowed and SOLD - FACT
2. A shorter wouldn't borrow shares to sell if they thought that the shares were going higher - FACT (doesn't mean that they are correct though)
Errrr , no...NOT exactly FACT at all LTI
1. A shorter borrow shares...but... you have no idea when they will be sold....the short-tracker lists the % over 0.5% borrowed...it doesnt advise when these shares are actually sold..... so a shorter can borrow shares and hold them like cards in their hands...and wait for the moment when they want to dump them on the market ....their intention is to sell them , but they themselves choose when that will be and that isnt noted, as such ...
Some shorters borrow a share and pay a lower fee to borrow them ( at a higher SP when other shorters have yet to realise the company position or furture problems) and hold them a while because they believe the market is going to drop the price anyway..eg after a results or RNS ...they will then sell them at that point when they think they can pull that sold off moment down further ..which they believe is coming but arent certain as to when...but they are ready
Just the same as a buyer..buys in anticipation for a future event to the upside
2. It depends on whether they think the price going higher is temporary...ie a buyers trap ...in which case they indeed borrow more and sell them at the point where they think the "buyers trap" has peaked
FACTS about shorters should be taken in context with regards to the many behaviour decisions they can make.....just the same as with buyers ...not much difference except that you turn the SP direction upside down....
The Company is also pleased to announce that a new Territory Manager covering the South East of the United Kingdom (Territory 3) will start on 5 August 2019.
This is part of the Company's recruitment drive for Territory Managers to cover the entire United Kingdom.
Sanj Naha, CEO commented:
"It is also promising that our recruitment drive is progressing well. We look forward to updating the market on further recruitment and operational developments."
so.....the update has been to say that you have in fact scrapped the majority of the TM idea..barely 2-3 months after suggesting it was progressing well ....
The telesales has a better chance, but it is still all very competitive
HS2 - everyone wants a piece of the project action, with little concern regards the taxpayers who will pay for it.
They always do these unrealistic initial costings in order to get the initial go ahead....knowing that in time the REAL cost will x2, or x3 ...
I wonder what the (number of passengers per kilometre) expectations are, and how they compare to France for example.
The election spending pledges appear to be getting a little bit out of hand ...one wonders which of them will fail to make reality
" trying to get back on their feet " unfortunately carries a lot of risk with it....hence the lower SP and the unwillingness of any fund/bank etc to invest in a right issue at a price that they dont believe matches the risk ....
markets value the SP against risks ...
you have to also accept that if a company is "distressed" ..how did they manage to get themselves into that situation... did they not see what was ahead of them?