Member Info for Racing_Green

There was a small bank called Metro
Whose shareholders refused to let go
When the share price soared
The shareholders scored
And the shorters plans were all spent too

How about having a go at the end of year price? Just for fun. Any takers?

"IMHO they are going to make annoucement on New Chair and outcome of the FCA"

Well one of either Boris or Jeremy will probably be looking for a new job tomorrow and so will be available....Just saying...

Marshall Wace reduce again. Total short down to 6.8% now.

I've just done a quick count back. Of the 44 posts on this board since 8am today, just over half (23) contain abuse directed at one or more other people posting. Is there any chance we could all focus discussion on the prospects (good or bad) for Metro Bank shares, rather than on each other? Please?

If you aggregate Cohen and the HFs shorting into a single entity rather than thinking of them separately then everything makes complete sense.... doesn't it?

By the by, £2.20 would be nice as it's the point at which I cease being underwater.

I can't remember which economist it was who said that there is a hierarchy of efficiency when spending money:

1) You are most efficient at spending your own money on yourself;
2) You are next most efficient at spending some else's money on yourself;
3) Then spending your money on someone else;
4) Least efficient is when you spend someone else's money on someone else.

Government spending fall into the fourth category. That said, there was an interesting article in The Economist a few weeks back which looked at how many very successful businesses have thrived thanks (in part) to timely assistance from the state.

Maybe that is the lesson: governments are generally terrible at running anything but can have a useful role when they support rather than attack the private sector. I think I've come to realise that any politcial party - whether of the left or right - that seeks to thrive by demonising its opponents is probably not worth considering.

Just my thoughts.

Rizzy1, I don't think that is quite right. The form of contract and the bid process are very influential in the final bid price. The prevalence of reverse auctions and the like engender a race to the bottom. Clients believe they have obtained the lowest price, which may be true, but I would contend they have not obtained the best value. Large construction companies have little choice but to participate as they need the workstream .

I'm sure they'd all love to bid on a 10% margin but they all know they would win nothing so it isn't a real option. Of course they could all get together and agree to bid on a 10% margin basis but that would be illegal rigging of the market - I think some piling companies were recently prosecuted for doing just that.

Unless and until there is a better understanding of large scale procurement then the current situation will prevail and companies like Kier will be vulnerable. For what it's worth, in my experience they are one of the better ones to work with and I have bought shares in them because I believe they will survive the current squeeze.

Just reflecting on what I think we learned from the last week. I guess my takeaways were that those people shorting this share don't yet think the jig is up and believe it will continue to be volatile enough to be worth playing. But maybe more importantly there is clearly a lot of pent up appetite from non-shorters to buy into Metro, just waiting for the right signal. If the SP can shoot up 80p on nothing more than an overheard wine bar conversation and a few unsubstantiated press comments, it's not hard to imagine what might happen if and when there is hard (positive) news. I'm encouraged by the last week and will certainly add if the SP falls back to anywhere around the 200p mark. I should add that I expect to still be holding this share at Easter next year (in other words, all good things take time).

lemmink I have reached a not dissimilar conclusion. I don't expect any massive drama (either good or bad) but I do think there will be a gradual but significant rise, even if my target is a bit lower than yours. Only time will tell, but I am happy sitting on my holding here for the forseeable future.

Imagine you had never heard of Metro, but were looking at this afresh. Charismatic but (arguably) egotistical founder has departed. A little local trouble with the regulator (but which bank hasn't?) bubbling away in the background. Successful but expensive recent bond issue. Reasonably robust finances/capital ratios. You look at the numbers etc published yesterday but remember you are doing this blind; you don't know the SP. What share price would you guess? I'm going to go out on a limb here and say I doubt anyone would be going for 205p.

The shareholders own the business. Fining the business for damaging shareholder value makes no sense whatsoever. You would be effectively fining the owners for the loss they have already suffered.

Fining a business because of their management errors does make sense. That is telling the owners - the shareholders - to appoint better management or to get their existing management to get their house in order.

So no the FCA won't levy a fine just because shareholders lost out, but only because of mismanagement.

I recently posted on a different board (MTRO) that what we are seeing with Kier is a successful closing out by the shorters of their positions. MW have more than halved their holding since mid-August without any noticeable effect on the SP. Squarepoint achieved the same already. I hope their exit - and the sale of KL - will clear the way for the SP to rise back to 150-200p by year end.

Check out Kier. Look at how Marshall Wace have reduced their short position over the last couple of months, without affecting the share price noticeably. I'm invested in both Kier and Metro, but don't expect a sudden upward explosion in the share price of either. I will happily settle for a slow, steady gain over the next 12-18 months.

Any chance we could return this board to a discussion about Metro Bank rather than a debate on the merits or otherwise of Brexit? Just a thought.

....to start the daily game of pin the tail on the donkey, also known as predict the closing SP? Come on, you know you want to.

You're right. I was being too specific. The area I work in is 65% materials, 35% labour but that doesn't necessarily relate to the whole company and may well be atypical. Like you I've over 30 years experience in construction and I agree entirely - Kier are one of the better contractors out there. A very different beast from Carillion!

I think saying miniscule margins and unpredictability of construction is both correct and an oversimplification. If you are, say, a jeweller then you sell few products at a huge margin. If you are a supermarket, then you're at the other end of the spectrum: lots of products, small margin.

Construction costs are primarily materials and, to a lesser extent, labour. Materials are not subject to much risk - you know the volume of concrete to pour a slab - but also attract little mark-up. Ditto labour. So construction margins overall are low. And unlike, say, share trading, there really isn't opportunity to make a sudden massive profit.

The risks, for a well run construction company are also relatively low. I take the point about unforeseen ground conditions but these can, and are, mitigated to a large degree by good ground investigation.

But over and above everything, construction is a cashflow business. Unlike the supermarkets, who hold their suppliers by the balls, contractors have to pay their suppliers promptly or lose them. Kier have reduced their supplier payment time. This is probably the strongest single signal that they are in recovery mode and on the way back up. Their now defunct competitors went bust because suppliers stopped supplying them.

To declare an interest, my company works as a supplier to Kier and to all the major supermarkets. I'd rather take a contract with the former than the latter.

The problem for the SP is that a large construction company is like a supertanker. It takes a while to change direction. It's not going to start surfing downwind anytime soon. But it's no longer bashing into the waves either. Don't expect sudden transformation in the figures (or the SP) but do expect a steady recovery over the next couple of years.

None of the above will stop the speculators/shifters, who might just succeed in ruining a pretty good company to satisfy their short term greed.

A change of 0.9p on the day. You have to smile. As someone once said: "When all was said and done, considerably more was said than was done".

Dave
What you have is a volatile stock. It's going to yo yo a fair bit. No-one here can predict exactly how. If we could we wouldn't be here. Constantly asking for short term/daily predictions is really pretty futile. The best anyone can do is try and predict based on available evidence - and no-one really has the evidence to predict performance over a few hours. What you can say is that the latest shorting of the stock has failed, at least for the time being (though they no doubt cleaned up earlier). My guess is that there won't be another serious attempt until after the September results. If the results are good then the shorters will back off. My best guess is a more stable price in the 150-200p range in that scenario. If the results are bad (or even just underwhelming) then expect to see the stock take a hammering. But no-one here can tell you which of those two scenarios will play out - or if there will be a third scenario. For the record I bought first on the way down at around 200, then bought again on the way back up at 79 and then again at 82, mostly to cover off the losses on the 200. If you're a novice as you say then my best advice is to sit back, watch the show and don't dip your toe in the water on this one - treat it as a learning exercise. There will be another one along shortly that you can try your luck with. I hope that helps.
RG