Member Info for ryanf

How embarrassing and humiliating this must be for Moulding.

£7 close?

Maybe he is, "diddly squat" farm refers to his returns from his THG investment.

I think/hope he means that the value of Ingenuity reduces proportionally and THG decreases. Summary:

At 49p:

Ingenuity has equity value of £100m.

All diluted shares will be converted into Ingenuity shares on demerger (approx 200m shares).

Under 49p:

Ingenuity equity value decreases proportionally as THG decreases. We are 16.5% down from 49p, so Ingenuity equity value currently stands at £83.5m.

The same number of shares will be converted into Ingenuity (200m).

Over 49p:

Ingenuity equity value capped at £100m.

Therefore, fewer THG shares required to convert into Ingenuity. You can calculate the number of shares converted at different share prices.

Wonder what the chances are that matt never intended to demerge Ingenuity, even after announcing it, instead using it as an excuse to raise funds to take THG through choppy waters until Ingenuity capex is mostly complete? And hoped the promise of demerging would cause the market to boost the SP but it instead went into reverse?

Either way, hopefully days away now from knowing.

Ah, maybe it was this, trying to protect the divine leader?

"Leadership Changes: If the market’s perception of the CEO is significantly negative, the board might consider leadership changes or bringing in additional experienced executives to support the CEO."

Getting to that time Matt...

Paha, wish investor relations spent the time managing the relationships with shareholders rather than just deleting posts. I'll repost my AI post with VERY clear solutions to increase the SP. Really don't know why that would be deleted...

It's not difficult to ask AI some ways of fixing the problems you brought upon yourselves, and it gives some pretty simple solutions:

It sounds like THG is facing a challenging situation. Here are a few steps the company could consider to improve its share price and regain investor confidence:

1. Clear Communication and Transparency

Release the Circular Promptly: The delay in releasing the circular is likely contributing to uncertainty and negative sentiment. Ensuring timely and transparent communication about the demerger and its expected benefits is crucial.

Regular Updates: Provide regular updates on the progress of the demerger and other strategic initiatives. Transparency can help rebuild trust with investors.

2. Address Leadership Concerns

CEO Communication: The CEO should address investor concerns directly, perhaps through a public statement or an investor call. Acknowledging the issues and outlining a clear plan for addressing them can help improve sentiment.

Leadership Changes: If the market’s perception of the CEO is significantly negative, the board might consider leadership changes or bringing in additional experienced executives to support the CEO.

3. Strategic Initiatives

Focus on Core Strengths: Emphasize the company’s core strengths and how the demerger will enhance these areas. Highlighting successful parts of the business can help shift focus away from current challenges.

Cost Management: Implement cost-saving measures and improve operational efficiency to boost profitability, which can positively impact the share price.

4. Investor Relations

Engage with Investors: Proactively engage with institutional investors and analysts to explain the strategic vision and address any concerns. Building strong relationships with key stakeholders can help stabilize the share price.

Share Buybacks: If financially feasible, consider share buybacks to signal confidence in the company’s future and support the share price.

5. Market Sentiment

Positive News Flow: Share positive news and milestones regularly, such as new partnerships, product launches, or market expansions. Positive news can help counteract negative sentiment.

6. Operational Performance

Deliver Results: Ultimately, consistent delivery of strong financial and operational results will be the most effective way to improve the share price. Meeting or exceeding market expectations can help rebuild investor confidence.

Given the current situation, it’s essential for THG to act swiftly and decisively to address investor concerns and improve market sentiment. If you have any specific areas you’d like to explore further, feel free to let me know!

Caveating 2 things:

● Think it's more like value of Ingenuity is APPROX 15% dilution. Think £25m of equity value from THG moves to Ingenuity, but its pretty negligible.

● The number of shares for Ingenuity is CURRENTLY known, and as long as THG SP pre split remains below 49p. If THG SP goes above 49p, the equity value of Ingenuity remains at £100m, meaning the number of THG shares attributed to Ingenuity would be less. Although it doesn't currently look like it's a likely scenario we have to think about, sadly...

The "cancellation" of shares works using the 15% dilution of THG which will be used solely for Ingenuity. Basically, the dilution is used to create shares for Ingenuity split. It's not a true cancellation, but it is in respect of the pure number of shares attributed to THG.

The value attributed to Ingenuity on split goes down as THG whole goes down, meaning the number of shares from THG attributed to Ingenuity is already known, and is the 15% dilution. Roughly 200m shares?

I find the comments from Ashley to be incredibly hypocritical. Happy to kick his toys out the pram ay assets being sold on the cheap because he's a significant shareholder in boohoo, but THG is disposing of its Ingenuity division for cheap and Ashley decided to use that as an opportunity to invest there.

Pot calling the kettle black.

At least he's on your side though, thg shareholders feel pretty helpless at this stage.

Thanks micasan, I suppose my point still stands since I'm considering share price pre and post demerger which is driven by equity value and share count...

Share price for RemainCo will be unaffected by the mechanic of demerging.

15% extra shares issued are due to be converted to Ingenuity shares. You can choose to keep them or not. The conversion rate would be approx split of enterprise value for RemainCo and Ingenuity (£1.8bn to £300m respectively).

Since extra 15% shares will be converted to Ingenuity, there will be no dilution in RemainCo. Moulding stated this in the call!

In summary, pre-demerger:

• Group Enterprise Value (market cap + debt + cash): £2.1bn

• Group Equity Value (current market cap): £700m

• Group Share Count: 1.5bn (including 15% extra shares)

• Group Share Price: 46p (£700m market cap / 1.5bn share count)

Summary after demerger:

RemainCo:

• RemainCo Enterprise Value: £1.8bn (£0.3bn value assigned to Ingenuity).

• RemainCo Equity Value: unknown but let's assume it decreases by £100m due to BOD valuation of Ingenuity, so £600m

• RemainCo Share Count: 1.3bn (conversion of 15% dilution to Ingenuity)

• RemainCo Share Price (assumed): 600m / 1.3bn = 46p

You can do Group (pre) - RemainCo (post) to work out Ingenuity (post).

The whole drop of share price is in theory being driven by how the Enterprise Value of the RemainCo will be built up and how that has changed (I.e. keeping all debt in RemainCo which the market has deemed unfair to RemainCo - I agree), but in addition it's also being driven by uncertainty of what the demerger really means and allowing shorts to drive their negative agenda.

Once the circular gets released, I see significant upside, since, despite debt being left in RemainCo (which reduces theoretical share price target), the intrinsic Equity Value of both Beauty and Nutrition should be much higher than £600m combined, and the number you come up with can be driven by different valuation metrics that we talk about (FCF, EBITDA margins, price to sales, DCF, etc...).

Rock, that's if you believe that the market priced Ingenuity greater than £0, which I don't. Now back to your short, where did bullish rock go? :(

Although Ephemeral, Selkirk highlighted they're aiming for company's with an EV of up to £1bn. That doesn't mean that £1bn will be accepted for the whole group, and really wouldn't make sense especially since Moulding holds over 20%.

A bid for RemainCo into different ownership is completely different to demerger of Ingenuity, where all shareholders have the option to keep their Ingenuity share.

They'd have to give a premium to EV for RemainCo. I hope £2+ is the figure.

So long as the bid for the whole is north of £2, I don't care who it is.

I've seen 80p banded around, and I hope we're not being fed this to prepare us for another low ball buyout.

Matt, remember what you said at the AGM about looking after the smallest of shareholders.

This probably means the shorts are going to drive the bearish narrative, worse than ever before right up until demerger, to try and get some poor saps to sell. I'm sure they'll use funny tactics to manipulate the price down until some point between now and the new year before the price can re-rate.

I'll probably leave the proportionate share or a bit more in ingenuity in the hopes that RemainCo still makes me a healthy return with the potential for ridiculous gains on Ingenuity in 5-10 years time. If it doesn't work out I'd still have my RemainCo shares.

Ah ok fair enough, GL

Bit dangerous to say it's a buying opportunity when it's dropped 15% with no material news released. Suggests something happened in the background.

Ah yea you're right Yorek, my bad. Wonder how they'd manage it if more than £307m worth of shares wanted Ingenuity?