Member Info for Quickdip

Pullback usually happens in the afternoon, so I just sold the holding I bought this morning.

Cheers guys. Nice tidy profit.

I’m back in. I said when the directors bought in I would too :)

Mr nex walks into a bank, asks for a loan to refinance his assets, but the return those assets produce is less than current interest rates. Computer says no.

Mr Nex then does a £400m rights issue against a £666m market cap. Shareholders massively diluted. Mr Asos says, “yep, that happened to me too”, mr Tui says “yep, just how it goes these days”. Mr Marstons says “tell me about it, we’re having to selling the pubs off to clear debt”

Not saying this will happen but it’s a possibility that must be considered through those rose tinted spectacles.

Don’t take it to heart people, it’s all tongue in cheek 😝 comments made on here have no effect on the SP, it was still going down when we’re we’re all bullish and blinded by the SP chart.

Schmoky,

It’s manageable because it’s still fixed on low rates.

This isn’t just a question of being able to afford higher rates. What makes you think nex will be able to secure billions of debt refinancing when other companies can’t?

Directors know it, fund managers know it, in fact the only professionals who aren’t steering clear are shorters.

Wow calm down Paddy. I sold out my small holding of Asos, realised I caught a falling knife and lost about 7%- so what, move on. But actually, it was a real eye opener with what happens when debt needs to be refinanced, which is why I sold up here, and I already saved a hell of a lot more than 7%.

Since you’re so obsessed with Asos on a nex board, let me remind you it declined so fast because it couldn’t even borrow £75m, so had to do a rights issue. When the debt starts needing to be refinanced here, particularly with such low interest cover, it’ll be an absolute blood bath. Same happened at TUI. The smart money knows it, but the PI’s are oblivious until the sh*t hits the fan.

This is very good news.

3-4% is nothing, you negotiate more than that off the asking price in a strong market anyway.

To put it in to perspective, this share has fallen over 60% on fears house prices could drop 30% (see below link), but they have only fallen 4% from peak, so this is massively oversold.

https://www.thesun.co.uk/money/20318471/house-prices-fall-30-per-cent/amp/

Terry 🤫 nobody wants to know what they’re getting themselves into.

If nobody mentions it, all will be fine 🤫

One fund shorting 0.7% is nothing. Could just be a hedge against a long position.

I’ve given my head a wobble folks and everything looks fine and dandy.

It’s just having a 2 year bump in the road.

All the directors must just short of cash or they’d be snapping these up like hot cakes.

Shorters obviously got it wrong too.

Refinancing billions of debt is no problem. TUI investors will tell you that.

No need to worry about another RI- shareholders only been diluted about 75% since 2009.

But the best thing is that SP chart looks fantastic.

Will put a few £k in this in the morning.

Tangible bv at about £11 a share, plenty of cash, no debt.

The SP went back 10 years in the financial crash. This has already gone back 10 years and times are nowhere near as bad now.

WT,

I am referring to total debt. Nex needs the cash flow to operate. It can’t just pay off trade payables with trade receivables.

Using your house analogy it’s like having the income to pay your 2% mortgage, but can’t afford it when you have to refinance to 5% rates- the house gets repossessed.

Nex relies on cheap debt because it’s return on assets is so low.

Paddy, correct, the book equity in Nex is made up entirely of goodwill. The tangible assets are cancelled out by the debt.

WT, do enlighten us the correct debt figure and why the figure stated on the latest accounts In misinformation.

KG, I didn’t expect it to fall quite so fast tbh hitting a new 52w 3 days on the trot. Maybe people didn’t realise debt was 4x market cap, and how much that would dilute holders should another RI be needed. If everyone knew everything there’d be no need for a forum.

Paddy, much like those who bought this, KCT, Vod, Superdry. Or those that stayed in Nex expecting the pullback to happen ;-)

Always gets support at £12. Crazy to think this is priced at the days of lizz truss while all other housebuilders are up at least 30%.

Don’t see any house prices falling at all. Too much demand.

Some very real risks here hence SP hitting new lows every day. £2.8b debt against a sub 700m Mcap. Plenty of companies struggling to refinance debt, especially if margins are low compared to interest. With debt 4x higher than Mcap, if this needs a rights issue in future, the shares will plunge.

Not yet at the previous lows. It reached 66p in 2020.

I’m guess Paddyboy sold up today. Gone from posting several times a day to not at all today.

I did sense some panic when I mentioned the previous rights issue.

Barney, you really shouldn’t be investing without doing research. The SP was effectively a lot lower in 1993 due to there being about 80% less shares in issue.

Jnc, when you say the recent decline do you mean today, the week, a month, 3 months, 6 months, a year or 2 years?

Devastated paddy. If only I could buy them back for a few £k less now ;-)

I think it’s all getting a bit much for Paddy :/