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Steve, Ocado isn't down 89% from it's 18 month high!

THG 840p > 93p = 89% fall

Ocado £28 > £11 = 60% fall

If THG had fallen 60% from £8.40 it would be trading at £3.36...

That's why their issues won't have any impact here, although as I said yesterday the algo's will ensure that we don't get any sudden moves without good reason & keep as many PI's away from this as possible.

It's a fascinating situation IMO. I've begun to understand shorting dynamics a bit more in the last few months and from a high level you have two very different setups;

1. Plain vanilla shorting on the open market - hedge fund A sells shares on a daily basis on the order book, they are the 'never ending seller'. This is what we can observe in RENX / RNLX when watching the NASDAQ order book. Millennium International have been heavily selling into low volume, the result being a decline way beyond what 99% of PI's thought possible.

2. Shorting via securities lending; borrowing shares from an existing holder & then selling them. This is what has been happening over at Alphawave. Blackrock own 7% of the stock and currently have ~16m shares out on loan, a couple of days ago Naya Capital reported a 0.3% decrease in their short position (1.9m shares), nothing like this volume was traded on the open market, so we know they borrowed shares from Blackrock, sold them at x price and then bought them back lower. There are no liquidity issues with this method as it's effectively 'off book'. A short squeeze isn't going to happen.

You can only tell the difference if you watch order flow and movement of short positions very carefully.

Millennium's position will be up sh*t creek if RENX surprises them, clearly a $50b AUM hedge fund won't care a jot if they lose a few million here, however someone will look quite silly.

FWIW I suspect they are experimenting with quant strategies on small cap biotechs; how far can you drive the price down in the current environment? It'll be algo driven & likely self perpetuating - the lower the share price is = the higher the cost of capital for an equity raise = the less chance a company has of scaling it's product = the lower the estimated NPV of future cash flows.

NASDAQ had shown a bit of support the last 2 days at $6, although the selling continued on both days. My guess is the short will be at 1.5% by the end of this week. Exposure must be capped somewhere so unless there is another hedgie willing to short further down, the game may be about to change...

This could also explain why RENX have delayed publishing their Q2 results / any other news - let the shorters use their ammo up and then hit them hard...

The results and outlook are simply awful, the fact they are guiding to 2026 before they achieve 4% adjusted EBITDA profitability shows how little operational leverage they have.

Picking one thing out, the 170bps reduction in take rate is a serious decline & cost them ~£112m in gross profit, at 27.5% it still seems very high given the generic business nature of ROO. I suspect it’ll be close to 20% by 2026 if not below. That is a serious headwind for a ‘growth’ company!

Avoid like the plague in my opinion.

No chance the management are allowed to buy in the time before a results release, look at December, results were released on the 7th and they bought on the 8th,9th,13th and 17th at around $15. I'd imagine they have a window after results of 2-3 weeks where they can buy.

Steve you need to take it easy on the 90p chat, it's just a number and will be irrelevant this time next year... FWIW the UT was at 91.7p, not that it matters as it could go either way tomorrow / the near term with the underworld in control for now.

"With so many good stocks fallen 30/40% in the last few months it makes me wonder if its worthwhile holding this with all the manipulation"

Here's my take;

THG is down 62% year to date which is more than almost every US growth stock & far more than most relevant LSE growth stocks, e.g. Boohoo is only down 27% YTD, ASOS 29%, FEVR 39%

If we take the average of those three (31.6%) and apply it to the THG share price on 31/12 of £2.32 we'd have a current price of £1.59 vs the actual of 87p.

However, what gives THG an exceptional risk v reward balance is the fact that in the 3 month period from 30/09/21 - 31/12/21 the shares declined 50% from £5.07 to £2.32.

In the same period, BOO declined 42%, ASOS 19% and FEVR gained 14%... that's an average decline of 15.6%

So all things being equal, we could have expected THG to decline from £5.07 to £4.27 in Q4 and then from £4.27 to £2.92 in Q1 to date.

So whilst many stocks have declined 30-40% from peak value & therefore have 60-80% upside, THG is effectively trading at just 30% of the value it could / should be right now!

This means that at 87p it has 235% upside just to get back to where it would be if it had performed in line with it's peers (£2.92) and a mammoth 482% upside back to where it stood on 30/09 (£5.07)

IMO it's being manipulated to stop too many PI's realising this & getting in before an inevitable gap up at some point soon - be that on news of the Beauty spin off, SB option for ingenuity, new Chairman, PE acquisition or even simply results. Nobody knows when news will land but it will have to at some point!

Where was the confirmation of the 24th for results @Hawker? Completely overcooked and driven by wider market sentiment, however the impact could have been reduced if they had $100m in the bank rather than $40m!

And agree on the self fulfilling prophesy, shorting induces fear and paranoia which is only going to encourage share price decline in the current environment. Companies have to counter this with cold hard facts, if one of those is raising capital at a price lower than you think is fair value then that's just life... burying your head in the sand is not the answer!

Unbelievable behaviour from the board, I can't for the life of me understand why they have decided to try and ride out the horrendous capital market conditions rather than bite the bullet and raise ~$50m at £5/4/3 - take your pick. Now the share price is a shade over £2 and plummeting, they have boxed themselves into a corner.

Verici DX, the company RENX spun off in 2019 for £14.5m just managed to raised $13m at a £60m post money valuation, if they can do it with a product that is years behind RENX then what on earth are the management doing here?

Crazy to see such value destruction.

Some back of a fag packet maths on this acquisition;

As per Sharepad data, prior to this acquisition FY2023 adjusted EBITDA was forecast to be $148.5m on $231.6m turnover, an EBITDA margin of 64%... this is in line with the admission doc which stated 50% EBITDA margin on non CPP work + 90% EBITDA margin on CPP...

Today they declared;

"Forecast FY 2023 revenue for the combined group is anticipated to reach between US$325m to US$360m"

"2023 adjusted EBITDA margins for the group are expected to be between 32-36%"

So forecast revenue has increased by $93-128m, but adjusted EBITDA has decreased to between $104m - $130m...

As usual with AWE, there is a distinct lack of clarity - have they effectively downgraded future expectations on China revenue & replaced it with OpenFive? Certainly the 32-36% and 40-45% for 2025 are much lower than IPO guidance.

The other point I'd make is that if OpenFive revenues are ~$90m at say a 20% EBITDA margin, then paying just $210m to acquire them makes AWE's market cap of $1.3b look expensive...

Agree Radius, it will very likely be equity, JV project equity, government funding & potentially debt. Either way very complex & quite possibly why the old CFO decided to leave for pastures new. Even for a $1b new entrant like FREYR Battery the challenges / execution are tough, never mind a minnow like AMTE. I'm still rooting for them though!

How exactly are they going to finance the build of a new gigafactory with a market cap of £31.7m?! It's like talking about going into space but having no reasonable way of paying the $450k cost of a ticket...

"almost all the US companies are valuated at 20x-30x their revenue"

This is b*llocks now I'm afraid, it was somewhat true 12 months ago but all tech / growth companies have been butchered. THG is clearly undervalued though, it's a buy, hold & wait situation from here.

Fantastic news this morning, the revenue & profit generating potential from here is very significant.

"Satago's platform will introduce a new digitised proposition designed to help the Bank further support UK businesses. Satago expects to be paid a recurring fee for each customer of the Bank which utilises Satago's platform, as well as one-off implementation fees, with the final terms of this landmark agreement subject to commercial negotiation.

TruFin is also pleased to announce that, ahead of signing the commercial agreement, Lloyds Banking Group has today completed an investment of £5 million of new equity capital in Satago, at a pre-money valuation of £20 million. All parties believe that the commercial agreement will be transformational for Satago and has the potential to deliver significant equity value uplift for Satago."

@musclehead, based on your basic analysis, how can you explain the fact that REVB is trading at a market cap of £327m with forecast 2022 PBT of £10.2m? It's also down by nearly 35% from it's 2021 IPO price of £1.60... it was setup in 2015 and even uses THG ingenuity... there is a clear independent listed benchmark from Cult & THG Beauty that makes your opinion look very silly indeed.

Re. A full update, it's of note that the following changes took place on companies house late last week;

- Memorandum and Articles of Association filed for THG Beauty Limited & THG Nutrition Limited (4th March)

- Ownership of Cult Beauty + Acheson & Acheson changed to sit under THG Beauty from THG Holdings (4th March)

- Ownership of Brighter Foods changed to sit under THG Nutrition from THG Holdings (3rd March)

There is undoubtedly a hell of a lot going on behind the scenes here which takes time to pull together, ultimately the numbers will do the talking and this could easily do 200% in a day on the right update IMO.

I could possibly understand the valuation if THG was just comprised of Myprotein & Ingenuity, however the fact beauty is such a dominant component makes it ludicrous. Beauty spending isn’t really discretionary and certainly not in the same bucket as fast fashion so shouldn’t be valued as if it’s going to get hit by a train.

Revolution Beauty had a market cap of £331m at close on Friday, 2022 forecasts are for £197m revenue & ~£10m EBITDA.

Q4 THG Beauty revenue was £406m, at an adjusted EBITDA margin of ~7.55% (2021 midpoint for group, so beauty could better / worse), that would be quarterly EBITDA of £30.6m & annual EBITDA of £122m…

Cult Beauty alone was bought for £275m and as per companies house showed similar profitability metrics to REVB.

So at £1b market cap this has to be near rock bottom? Nevermind nutrition, ingenuity etc. Will add some more tomorrow if it dips below 80p.

Agree on both the excellent & consistent communication via Twitter + the fact that we are well positioned with the PFS around the corner. I've been really happy to see how we've held up in market turbulence, the RSI is now back down in the 50's having been overbought a couple of weeks back, we are getting ready for the next leg up!

I'm not really sure what the short thesis is at this price level?

Some basic analysis shows this is now unbelievably cheap vs listed peers. You could argue that the current market cap is covered by Lookfantastic alone (using LSE listed REVB as a benchmark).

My suspicion is new shorters such as D.E.Shaw have some part to play in any takeover deal, the lower they can drive the price the bigger the apparent premium will appear at the time of any announcement. Whatever this costs them will be offset somewhere else in the hedge fund empire.

I really wouldn't be surprised if we see a 200-300% premium on any deal, the fundamentals easily cover it.