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Just from my reading of the charts, we can go as low as 390 and still respect the upward channel of higher highs and higher lows.
The last time asos released a "trading update" prior to FY results was in 2020 when they materially upgraded their guidance in advance of the FY results. I think they're going to tell us whether they are significantly above or below their guidance.
I've emailed investor relations to try and get information as to the structure of the trading update.
I'd say relative performance against Boohoo would suggest some big player thinks the trading update will be positive...
Wrong, qube trade with algorithms
If shorts increase and trend has changed to bullish, the greater the squeeze upwards when they close out.
Fast fashion illustrates the principle of the survival of the fittest. UK contenders Boohoo and Asos are decidedly out of breath.
The online-only pair have lost 90 per cent of their value since the era of lockdowns and low interest rates. Fashion heavyweight Frasers Group, controlled by Sports Direct entrepreneur Mike Ashley, is circling with stakes in both. Frasers upped its holding in Boohoo to one-tenth on Friday, sending shares in the laggard sharply higher.
Frasers is now run by Ashley’s son-in-law Michael Murray. It has diversified across sports, premium and discount retailing following a spate of acquisitions. An opportunistic push into young women’s fashion is a natural next step.
Boohoo specialises in clothing for young women along with its other brands Nasty Gal and PrettyLittleThing. These would pair well with Missguided, which Frasers acquired out of administration last year. A tie-up between Asos and Boohoo is also an option. Both are expected to be lossmaking this year. A defensive merger would save costs.
Past form, however, suggests Frasers might achieve the same results by taking a subtler approach than consolidation.
A 10 per cent Hugo Boss stake first acquired in 2020 grew to a position equal to one-third of the fashion house’s shares. That was used to increase collaboration and get more of the German brand’s higher-end kit into Frasers’ stores. Growth has since picked up and Hugo Boss shares have almost tripled since Frasers’ initial investment. It is now taking profits and has sold down some of its stake.
Britain’s cash-strapped consumers and slowing growth mean fashion remains deeply out of favour with wider investors. Frasers’ shares trade at nine times forward earnings, the bottom of their historical trading range. The broader FTSE apparel sector is trading similarly. Opportunistic dealing by one of its shrewdest participants is a good reason to think a second wind is not that far away.
By my approx calculations, they're down £650k in 3 weeks. Could get a lot worse for them, hopefully.
Thanks smugger, didn't realise it wasn't cash settled but that makes a lot of sense with the voting rights!
Yea you're right turtlehead. The more the SP goes up, the more likely the put options are worthless to the holder (I.e. those who bought the puts off Mike). So Mike will only own 10% or whatever he has in actual stock but will have collected a hefty premium in doing so. I reckon about £5m in put premium alone.
I call BS Al4x. Its OK to be wrong.
Thought you were going to wait to buy Al4x?
Al4x
Posted in: ASC
Posts: 119
Price: 373.60
No Opinion
RE: SUB £4. Coming22 Aug 2023 23:52
I'll still be watching. It's an interesting share to watch as I've been watching it for a long time. Also how the boards behave. Both ramping and deramping.
There are only a small number of posters who post with any form of facts, some for some against. It's a shame so many posts are just ramping and deramping with no actual content to support either view.
I'll be watching for an improvement vs it's peers over this summer. I won't be going back in before that happens. And if it doesnt. I won't be going in at all.
Trading halted!
I'm a willing seller, all it'll take is £30 per share.
Just thinking, if interest rates come down, can asos refinance their debt they have with Elliot currently sitting at 11%?
We currently have about 15 companies in the ftse 250 that have a lower market cap than asos. But I don't know whether other companies who are currently out of the ftse 250 and have a higher market cap than asos (so would rank above them)...
Still, we have a good chance at £500m market cap imo.
But why write off Camelot or MA buying more as just that? The more they are buying shares, the more likely the shorts will wake up and smell the coffee. Or even better we get a buyout offer.
Judging by the amount both Camelot and MA have been buying over these past few weeks, I'm confident we get a re-rate upwards soon.
Ohhh and Camelot have increased their holdings further in newest RNS!
Interesting that the Betaville article hasn't filtered through into the SP yet. Although I do remember it taking some time for the THG SP to catch up on similar leaks. Then when THG released the RNS, the SP went ballistic. Made 100% on that trade in the space of a few weeks. Could easily happen here too, MA has always wanted Asos, and especially Topshop/Topman.
https://www.betaville.co.uk/betaville-intelligence/rare-alert-asos-said-to-part-13/
Well said HH, Nic reminds me of Ste at THG...
"Where it's at is with oil stocks. Despite the green agenda oil will continue to reign supreme as nothing else works at scale."
So you like to buy high and sell low Robina? Oil has had its run. Everything looks great now, but when demand destruction happens, oil stocks will fall. Yes it might hover at these highs for a while, but you're not going to make any money (except collect a miniscule dividend). Price of oil has fallen, only a matter of time before the companies do too.
The biggest returns for investors (not traders) will be had from DCAing into cheap companies like S4 and waiting for the turnaround.