Paulleydee......to be fair to Twrth, you were a bit selective in highlighting the positive part of the article.
Re your other comment, I would argue that the ASC share price (presently at £5.08) is hardly 'flying' lol.
The HL tip has resulted in a little blip upwards and may support the ASC price above £5 for a while. However the trend and charts show a continued downward curve. The indicators are that most online retailers have had a testing time over Xmas and are selling at massive discounts. Turnover may be higher for the likes of ASC and Boohoo, but I doubt it will translate to profits.
I will still hold until mid January to hear the ASC update. Not sure when Boohoo will update. Meanwhile the Shorts continue to hold the power.
How 'Seeking Alpha' can claim ASC is still 'trading profitably' when it lost £31m at it's year end 31st August 2022, and confirmed it will remain loss-making for at least the first half of it's current year running into 2023 is beyond me. I would love to ask these so called experts at Seeking Alpha to explain. Am I missing something here?
I've noticed this stock often dips in the last half hour of trading. It's as if the shares are being manipulated in some way .....possibly by shorters. The trades seen over the period in question do not seem to corrolate with the sp. It's not until after trading hours that one sees the true ending price.
The shorters are in control here. There is no sign of them closing out. They are betting on disappointing news in January.
Many contributers here have said that these shorters will have to buy back masses at some point with a resultant big rise in the sp. Knowbody has rightly pointed out that that doesn't necessarily happen. The big shorters are very deft at playing on dips and reducing their positions very gradually.
In my view the stock was initially lucky today with some positive retail news elsewhere (Nike) and the market generally well up. I suspect the sp will be relatively stagnant until the new year.
ClaireSmith....Shein will not be banned. Nice try at another ramp though lol.
The trend is still on a downward course although there has been some resistence to going below £5, but I sense it's only a matter of time. Everything seems to be against the stock at present.
As indicated previously, with ASC being the highest shorted share on the exchange by a fair margin, there remains little prospect of the 'trend' reversing.
Am surprised to see the share at this low level prior to Xmas. We await a trading update on 12thJanuary. Unless there is evidence of either 1. a highly successful xmas season or 2. evidence of a turnaround in fortune from their new strategy (too early in my view), I fear there will be a profit warning with a resultant drop in price.
Big discounts commenced on Monday. The MSE team expressed surprise at the bigger discounts this year (up to 80%)....from 70% last year. That does not bode well for margins and implies to me that they are trying to offload stale stock which they overbought earlier on. Remember, they've already written off about £130m of 'dead' stock.
I'm invested in this stock at £12.63 which is uncomfortable. On balance I still see ASC as getting through this tough period. A collaboration with Ashley could be interesting......I seem to recall that Frasers indicated that some arrangements could be mutually beneficial. Nevertheless, I could be holding on to this stock much longer than I had anticipated. If the trading update is better than expected, it is only then that I will consider averaging down.
Stoodio...agreed. Quite frankly though, what was the point of transferring her from Director of Group Finance to 'interim CFO' when it was blindingly obvious she was already on her way out. Clearly they failed to attract a quality candidate. In the 'interim period' pending her new appointment at another company, I doubt very much she will be doing anything constructive. Look at the RNS's and it seems to me that people at the top during 2022 are either leaving or being shuffled around eg. the CEO who was something else for a short while in the company before being promoted within. This company needs continuity together with quality management. The CEO has yet to prove himself with the revised modelling. I will reserve judgement until the Janaury trading statement.
NetZeroReady.....please clarify.
Re the interim CFO. Another one of my concerns at the top. She's not been there for five minutes and, as announced at the beginning of the month, is now jumping ship but will stay in post for six months until someone else is brave enough to take up the reigns. I saw the sp drift below 5 today and the trend depressingly is still downwards. I was tempted but resisted. I see this in the 4's next week at some point although Frasers acquisition activities elsewhere may prompt a blip at the start of the week. Some of the media reporting recently has been poor and inaccurate. MASH's 5% holding in ASC hasn't suddenly happened. They already held a strategic 3% for quite a while and only added approximately 2% recently. Don't get too excited yet.
Velo.....Thanks very much for clarifying the 'forecasts' aspect. I realised after my post that I'd worded things not necessarily the way I wanted, given that forecasts are of course effectively historical the moment after they've been set. I was however trying to establish when the figures had originally been stated, and was endeavouring to expose why it is now virtually impossible for them to achieve those results. I hope some of the events mentioned in my comments helped to explain some of the reasons. There are of course other aspects too including the economic climate (which has resulted in a large amount of returns), the rumours of credit insurance difficulties, unprofessional information leaks to 'friendly' brokers/analysts, and various news obtained by the press when it should have been notified officially by the company. I'm sure you can feel my frustration. It remains the case I'm invested in this company but I'm not going beyond my 'limit', and am resigned to sitting tight until I've at least heard the trading statement in January.
Velo......many thanks for general overview of the company.
However, I'd be interested to know where the 'markets estimated forecasts' came from. They appear to be historical and so, in my view, inaccurate. There's mention of net profit forecasts of c£21m for 2023 and c£53m for 2024. And yet even the company itself has acknowledged that 2023 will see a significant loss. I would not be surprised to see a loss of over £80m for 2023 particularly if they have to write down more stock.
You ask 'can we see anything untoward' to which you say no. Well I do. I see quite a few untowards!
For a start the revenue figures are flattening out and the forecast is similar for this year I believe. Growth is slowing comparatively and margins remain negligible. I know very little about fashion apart from the fact it often changes overnight, it is so fickle. What a mistake to buy so much stock (was it £1billion?) with the inevitable writedown of £130m.....so far. Sales on black friday were up, but higher revenue, as I constantly say, (and many don't seem to understand) does not convert to profit, if the margins are not there.
Let's look at the facts. ASC operating cash flow is negative. Debt is not satisfactorily covered from what I can see in the accounts. That may require more funding from somewhere. The company is unprofitable. The share price trend continues downwards. I didn't think it would get to this level until 12th January when the trading statement is due.
In answer to your question, we have already had sufficient news (some I've detailed above) to derail the 'profit' forecasts you mention. The existing management has a lot to prove. Also the CEO Calamonte has only been in position since June, having been promoted from within (he had been chief commercial officer since Jan '21) And it seems he owns less than 9k of shares in the company, hardly a resounding vote of confidence in my view. No-one from outside was either good or interested enough. The recent Chief financial officer has recently announced she's jumping ship having been in the job five minutes. All this disruption is unsettling especially in such a diificult time. No wonder the shorters are making a mint.
Todays announcement of a new non-executive 'tech expert' director appointment has done little to prompt a share blip rise. Lets hope he has a few innovative ideas. Meanwhile Mike Ashley's continues strategic holding is interesting but in my opinion it is doubtful he will enter the fray any time soon altough he may have a greater opportunity in January to buy cheaper.
No matter how sensible this might seem, I'm afraid it probably doesn't bode well for the share price in the short term. It implies (correctly or otherwise) that the company remains somewhat rudderless at the top, or has other 'issues' that they seem incapable of solving themselves. And still more rumours of credit insurance cut backs. Once again we have this news via someone else and not the company. It's not good enough. I can envisage this company being informally put up for sale which could be a good thing if more than one concern were interested, or conversely could be bad if no-one initially expressed interest and subsequently MASH entered the fray with an opportunistic offer.
ClaireSmith....Just regurgitated hope on your part Let's revisit a few quotes from you, starting from last year.
3rd Nov 2021 (price £26.00) ''With Xmas on the way and ASOS being in a very powerful market position the share at this relatively cheap price can't last for long'' .......and.......''all the bad news and doom is out in the open, the share price as settled to a natural floor.....''.
26th Nov 2021..(Price £24.86) ''Price back down to cheap level And now in the crazy sales period of black friday to end of xmas. Asos will do very well during this time and make a lot of money''
One year later 10 Dec 2022 : quote ''seems like this at the floor, and at the lowest point........''
Price now £5.79. No wonder you've been ramping all year. One day with all these predictions, the odds are you will eventually get it right. But I won't hold my breath. PS explain to me waht a 'natural floor' is. Is it when a share reaches £26.00? ....I'm intrigued.
Murmurs...I've vented my irriritation and pessimism many times, quite understandably in my opinion. I'm sure lots of other shareholders here also feel the frustration. It's tempting to sell out and invest somewhere else but it always seems stupid to sell at near the bottom. What I have to say on here has almost zero relevance to the share price. Same goes for the serial rampers. It is the big boys who are the manipulators, the hedge funds like Marshall Wace. Which is of course why I am concerned at it being the highest shortest share out there. I'm now fairly sure this is one I've got to tuck away for a couple of years.
Murmurs....Okay, I may have been a bit harsh with my wording. Let us just say that given all the aspects that have been against the retail sector recently, combined with a few other things going on within the company, the cash position remains uncertain. It also remains to be seen if the new initiatives work. Let's hope that those at the top have got their act together.
I haven't any particular agenda. Ammu may have confused me with another Simon on here who I believe has been shorting. He should check out my historic comments more diligently in future! I'm invested. I averaged down a couple of months ago and am at 12.63. I'ts always tempting to average down further but I've reached my limit for a single share. Having been stung more than once in the past I have a rigid figure I keep to. However I may do what Treacle suggested and sell on the bounce and buy back in lower to avoid adding extra capital. As KnowBody's article says, the chances are if we are 'patient' the odds are the shares will come good. Unfortunately when I originally invested it wasn't meant to be for the medium to long term!
Murmurs.....Thanks for the reply. While you disagree with me, with respect, when I commented today I was largely reiterating aspects that I've conveyed before and what I have consistently argued would probably happen. Where we are today is what I have been forecasting for a while, often to people's annoyance on here. I see no reason to change my stance that this is going to be a slow recovery, with shareholders having to be patient. We know the next results will show a bigger loss. High and growing revenue is meaningless if the margins aren't there. All the while the shorters are in to this extent (it's the biggest shorted company on the stock exchange) the position remains precarious, which is why Frasers is waiting in the wings. If Asos's revised strategy works then Frasers strategic holding and cross selling will benefit. Conversely if Asos starts to struggle, I imagine Ashley will be there to the rescue with a silly offer.
BadJob.......I concur with your views, much of which I have conveyed before and been regularly berated for!
Claire.....Sorry, but you've been talking quite a lot of drivel on a daily basis. As I've said over several months, realistically there has only been one direction in which this share has been destined to travel in the short term. See all the reasons I've reiterated in my previous comments. There's a lot of hope and desperation on this forum. I maintain my view that this probably has further to fall and will stay in this sort of zone until we see how bad (or mild) the profit warning will be in January.
There's been mention here of the likes of ASC merging with Zalando. Unlikely. Firstly Zalando has a capitalisation of at least twelve times ASC, and so such a move would basically be a takeover no matter how it was dressed up. And why would Zalando, who have a more successful model and management (hence their better performance), launch an approach now, when they could potentially pick up the pieces at a lower price later on which, by the way, is what Frasers are waiting for too with their strategic holding. Neither are likely to pay a premium for Asos. Add to that the gloomy retail outlook and the questionable top management, it is hardly surprising that the share is being manipulated by the vultures who see more money making to be had. As I have regularly said, some of the shorters on that list know far more than me and most on here. Given the present level of shorting, there is no way I would put in large lump sums into this company. I will reassess after an update, hopefully in January. Investing now is only for the brave.
The sort of press release below is very unsettling. I'm frustrated at the continued upheaval at top management level. Where is the management continuity, and coherence in terms of a long term strategy? One of the biggest mistakes in my opinion was to buy far too much inventory because I think in this fickle industry it's inevitable there will be more write-offs. If there is cash call next year, heaven knows where the price will go.
The quote in question: "A year from hell for online fast fashion firm ASOS isn't getting any better as interim finance boss Katy Mecklenburgh announces plans to step down just over a month after taking on the role," said AJ Bell's Mould.
"While there's nothing unusual about someone in a temporary position getting a job elsewhere, and she's not leaving for six months, it ramps up the pressure on ASOS to find a permanent replacement for Mecklenburgh's predecessor Mat Dunn and adds to the somewhat chaotic feel around the business," he added.
T4G.....Let us hope that Capex does indeed come out within budget. Your comment implies it's a given, which it isn't.
Introducing the loss making 'Isawitfirst' to the Fraser brand is probably a useful add on. At about £20m, just pocket money for MA. I very much hope he did indeed undertake due diligence given Jalal Kamani's alleged dubious connections over the last couple of years.
Looking forward to a probable interim update in the next four or five weeks, followed by more results in March. We shall then see if your optimistic outlook is warranted. Good luck with that. I see Berenberg have downgraded. It looks increasingly likely i.m.o of little movement in the share price until the new year when things will look a little clearer.
T4G ......what other shares I own and trade in has no relevance to the subject in hand, that being the challenges that online fashion retailers presently face. As I've said, I hold ASC and monitor one of it's closest rivals to assess signs of recovery in the sector. I add comment where I see fit as part of a discussion forum. You don't need to be so aggressive in your remarks simply because you disagree.
Looking at the background, I don't like the rumours I've read in the past about the way people close to the extended family of the founding owners are allegedly connected to disreputable clothing businesses. Stories (and they may just be that from stirrers) occasionally crop up on an ongoing basis. In my view, there's no smoke without fire.
Having said all that, BooHoo's has a decent u.s.p , that is having a quick fast fashion supply network allowing it to react to changing trends quickly which can increase margins and at the same time keeping prices low.
However the company is spending heavily on anticipated increased capacity needs, particularly overseas. That could be very expensive if increased sales do not material as envisaged. Running massive warehouses abroad quickly turns into loss making territory when there are large cash outflows. Just look at the sort of companies who have failed in the states. It's so protectionist over there.
I'm sure there's a reasonable mid to long term case in investing here. But while the shorts are so high, I'll avoid. As a small private investor, I tend not to short, it's too risky a game for me.
Trading4good.....For your information I'm invested in Asos (at a fair loss at the moment), a company who in my view, despite weaknesses in present top management, has better long term prospects than boohoo. I keep an eye on boohoo as the market seems to align it very closely to Asos. If either one moves in one direction, the other tends to follow. And of course just look who the two most shorted shares on the exchange are. Is it any wonder I'm bearish in the short term? If these companies see through the next year without cash calls or profit warnings, then the prospects will be so much brighter.
The market hasn't particularly looked favourably with regards to BooHoo's increased stake in Revolution Beauty, a company in deep trouble with arguably a failed business model.
Given that RB shares are suspended and the purchase was done 'out of trading' one wonders what they paid for the shares. They probably bought them for a virtually nothing with a bit of spare cash, on the basis that it was worth a punt. Nevertheless Boohoo will most likely need every bit of cash going to see through the next year. If I were a RB shareholder I wouldn't be happy knowing that 'a mate' of the company has had the opportunity to buy in dirt cheap when everyone else has been shut out. Correct me if I'm wrong, but who else (eg. the ordinary share buyer) had the opportunity to buy a suspended share at an undisclosed price? On top of this the share is suspended due to, what would appear to be, dodgy accounting information.
I'm not invested in this share but monitor it given it's alignment with Asos in the retail sector. I have no intention of buying Boohoo given the continual rumours about the way the owners run it and the very high shorting percentage. Having said that, the price is very low and one could quite easily see this double in the next six months (so long as thee's no profit warning in the next six weeks) given the market reads things in advance of events. Of course the owners must still be thinking about taking it private on the cheap. That too would infuriate shareholders.