Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The closed period means that no directors or key employed personnel can trade in the shares. Officially there is nothing to stop a trading update during this period, especially if there has been a material change in trading. Having said that, the closed period from 3rd March means the results are due in early April and will be announced shortly thereafter. So Barkley was buying while he could.
Nate D....I take a lot of notice of the shorters. I read more into their rise than I do Camelot's (Barker) recent share purchases. When looking at the top ten (declared) shorted companies, there is always a reason why their SPs are subdued with little prospect of a sudden significant rise. All are subject to various negative woes. Meanwhile, Barker's purchases are purely strategic. He was invited onto the board as a ''non-executive'' director; in my view an obvious defensive measure against other predators like MA. Like Povlsen, Barker is seen as an 'ally' of the company. He often trades long and is a smart operator. Nevertheless, he is a 'hedge' fund so will do what is best for him and his partner investors. In the short term he can withstand the vagaries of the markets so long as he sees 'eventual' light at the end of the tunnel with a big upside. But in the ''short term'' it all looks ominous to me. The longer Asos waits to give an update, the more they hope they can announce things are starting to turn around. Present online retail sales indicate otherwise. I assume we will get an update in the next few weeks, prior to official results in April. My prediction, probably bottom end of expectations or possibly a bit worse......plus of course the usual promises of jam tomorrow. Meanwhile MA is still waiting there, content to play the long game but equally ready to pounce if the opportunity arises.
Bfdinvestor........''ASOS is a far weaker business than Boo''. That's debateable! In my view they both have similar challenges, and each have their own different issues. Both are in dire need of a kick up the backside. Retail online is going to be in the doldrums for some time yet. A few days sunshine is going to do very little to stimulate two businesses who are ripe for takeover / merger, largely as a result of bad decisions at the top.
Macros, I agree. The BritBox sale sale helps the company focus on better things. The buyback will enhance divs for shareholders over the long term. Whether the proceeds could have been used to better effect is debateable.
Profit taking today was inevitable. This is still a very disappointing share and I have been in loss for quite some time. I live in hope it will be taken over.
The SP alignment here with Asos is telling. The difference between the two companies is that one has made many erroneous decisions over the last few years, whilst the other has found it difficult to extricate itself from dodgy background operations. On top of that, both have suffered one of the most difficult online retail times ever.
In my opinion, Boohoo is ripe for a takeover or merger. It needs to be rid of the founder executives, otherwise ir will remain at this depressed level.
Quite right Knowbody. I have invested far more than I had originally intended AI4X. About a third of my present holding was bought at just under £55 in October 2020. Eight further purchases down the line (falling knife and all that) ranging from £8.74 in June 2022 to £3.56 in June 2023 has left me at an average of precisely £7.38 which equates to a more comfortable 50% loss to date, but which nevertheless, I hope is realistically recoverable in due course. I did promise myself I would not average down further having reached my stop limit in one company. I'm tempted though, one more time.....but I said that last time!
Despite rumours to the contrary, I am not a 'de-ramper,' and actually I have no other motive than to recover my painful investment in this company. Unlike many, I am a realist and therefore have somewhat lower expectations than some other board members here. I and others have had to endure about three years of continuous disappointment; originally buying in at about £55 (yes, that's right, £55 not £5.50!) and averaging down to about £7.50, at huge cost. So, when I see, almost continuously on a daily basis, someone comment that this share is going to shoot up to some silly level, then it becomes frustrating. I think I'm entitled to have made the comments I have to cool things down. I have been largely correct on Asos over the last couple of years. From the things I read yesterday, anyone would think I had contained the SP at between £3.50 and £4.00 all on my own. Some feat that would have been!
Onto recent purchases Barker. He's been sweeping up available shares for about three days in a row. A show of confidence,and there's clearly a strategy in place either long term (unlikely in his case I think) or to influence a nearer situation happening (takeover or merger). The USA particularly, sees the UK market as dirt cheap as can be seen by various takeover approaches for other companies. Asos' capitalisation is a ridiculously cheap £450m. Despite Barker's significant 'buys', the market has hardly reacted, which in my view shows just how much this share is being manipulated by other unknown interested parties.
The shorts are still far too high in my opinion. However, counter that with the strategic move made by non-executive director, Barker (Camelot) in the last couple of days, makes for an interesting few weeks. Either Barker knows something we don't (this must be nearing the closed period in terms of directors trading) , or he is simply expressing mid to long term confidence in online retail and this particular enterprise. My major niggle though are the shorts and the clear manipulation that's been going on here for too long. Barker could be betting that the continued ' takeover' speculation will keep the shares fairly bouyant at around the present price despite the risk of possible disappointing results shortly.
I don't believe the next update will be anything but mediocre. Retail clothing is generally the weakest area and only the smartest guys with a finger in both online and high street pies are bucking the trend. Meanwhile MA and his manipulation of this share by using derivatives has reaped rewards up until now. He's probably more convinced then ever that he is on a win/win situation here. If results are better than expected, he will benefit from a higher price and the prospect of a good ongoing partnership. Similarly he could benefit by some approach from a foreign predator. If the company goes in the opposite direction, he's there to pick up the pieces with a view to merging it into his empire.
He must be delighted by the interest in Currys. What a nice little profit. However, Asos shareholders will be wanting caste iron proof that things are starting to turnaround. As I have warned on several occasions, any stagnation of sales/margins will see this share sticking around the £3.50/£4.20 mark, giving ample opportunity to make a quick buck here and there, albeit with some risk. Finally, on the basis of the opportunistic offer made for Currys (the usual type of premium), don't expect more than an initial 35%/50% premium for Asos, should it transpire...ie £5.50 to £6. Before anyone shouts me down, yes I know this, to many people, heavily undervalues the company, but that's what happens in these markets.
''Obviously, things have changed a bit'' - You're not kidding. Retail stocks are in the doldrums. Only the fittest survive and plenty are going under; those that know what they are doing are coping. Asos needs fundamental change and that includes the management. Disappointing results are on the horizon in my opinion. Hence the short postions and the lack of immediate optimism after the Christmas period. Asos are struggling due to poor decisions over the last few years. Frasers are thriving and overflowing with cash due to astute management. If we wait long enough, we will not be rewarded by a turnaround in fortunes, but by a takeover of sorts.......not necessarily by Frasers.
More potential future woes on the horizon for fashion retailers when they least need it.
It went by relatively unnoticed (about 6 months ago) but the European Commission proposed new rules to make producers responsible for the full life cycle of textile waste, in the hope it will boost the recycling sector and create a bigger market for second-hand clothes. The proposals follow a ban on the destruction of unsold garments, and new requirements for product durability. It includes clothing that comes into the EU. For companies such as Asos and Boohoo which are already under financial pressure, the investment required by regulatory changes might prove painful.
This isn't going to impact on these companies profitablility in the short term, but in my opinion will nevertheless be another factor in suppressing 'cheap' fashion retailers long term share prices. The quicker the likes of Asos and Boohoo merge or are acquired, the better. The sector is far too cluttered and any upturn in Asos' fortunes are, in my view, going to be painfully slow. I sense the next update will be disappointing. It was telling that there was no interim update after the run up to Christmas. If sales had been up, they would have been shouting it from the rooftops as other better performing retailers did. I don't think Frasers will go above 30% for obvious reasons, but will just sit it out with a view to pouncing (or indeed exiting) when they see fit. The other big shareholder also seems intent on sitting tight so it's a bit of a stalemate at the moment.
At today's sp, with reinvested divs over the last couple of years, I'm still down 21%. I'm naturally disappointed.
It's been promoted as one of the better quality IT's in this sector. I'm hoping for better things. It's all very well having a nice dividend yield, but it's no good if the sp steadily goes down!
To add to the recent comments concerning derivatives, Pokerchips is spot on. The RNS form is a bit misleading. I suppose it should really read that Frasers could 'potentially' have voting rights over that percentage quoted. So, as Pokerships has implied, if the SP drops significantly below the strike price (which I imagine is around the present price or a bit above) , then Frasers will be obligated to buy the physical shares at the strike price even though the shares might be significantly lower by expiry. Most people who 'sell puts' are betting the SP will rise or stay relatively stable at least. They do not normally want a situation whereby the SP drifts downwards because then they will be obliged to buy the shares at the original higher strike price, whereas if they hadn't done the derivative deal in the first place, they could buy the shares cheaper in the market. Of course the shorters are gambling the other way, which in turn subdues the SP.
Disappointing to see this slowly drift downwards. I must say it looks a tempting entry point, or in my case, averaging down.
Maybe the market is still uncomfortable about the price they paid for the most recent USA aquisition. Surely this is still a sound investment.
Up 7% today. Is this a delayed to the update last week, or something else I wonder. Now the old boss is back in charge, I'm hoping they will be on track to better things and further enhancements to the business.
It's looking pretty ominous. The fact that they have not indicated how pre-xmas went is telling and doesn't bode well. If it had been good, they would, by now, be shouting it from the roof tops. The overall gloomy retail results from elsewhere will probably also be reflected in Asos' update, whenever it arrives. I wish some of the top execs would put some faith in the company by investing. If they're not prepared to purchase at this price, I don't think I will either! MA is the gambler, and is unpredictable, but I think his strategy here is one of long term, although if things turn worse, he stills sees himself as a winner by picking up the pieces.
Jamess I concur with your view re the UK Stock Exchange. It's nothing like it used to be. One can blame Brexit to a certain extent, but New York is where it's at. Nevertheless, there are many undervalued UK stocks and I wouldn't be surprised to see even more approaces from forein companies, particularly from USA.
Asos looks as though they will avoid an update until March. Maybe they think the SP will gradually build in the disappointing results and gloomy outlook.
I see a lot of mergers and aquisitions in the next year or so. This market is overcrowded. Meanwhile Frasers continue their strategic investments; very much a win/win for them.
In my view Asos is a hold. Eventually someone is going to make an offer.
Having done my research, these are my final comments about this company, no doubt to the delight of MoneyShark!!!
The emergency cash being raised comes at the expense of private shareholders whose holdings will be virtually wiped out completely, through further dilution.
This is an equity raise of about $14million. Atari are taking up about $2million. Nichiporchik is taking up about $10million and the rest is open to retail offer.
Nichiporchik, the co-founder, took out £56million (about $70million ) with the IPO in 2021. His underwriting of this recent placing and retail issue is effectively a re-injection of a bit of this money. In my view, this is virtually taking the company private by the back door, but not quite.
Shareholders vote today. Over 50% support is needed (not including Niks present 38% holding) to pass the resolution.. With his injection he will have control over 50% of the company. He has also said that if there is not sufficient support, the company will file for chapter11 insolvency.
All this came about due to very few people noticing the early capitalisation of development costs that didn't show up in a hit to profitiability. On top of this, the company wasted tens of millions on Verses Evil and shut it down within two years. Additionally they have faced a couple of serious law suits.
The company has been run by games wizards who have virtually zero business acumen, and who in my view are cowboys incapable of running a business. Good old Nik. Down to his last £48,000,000 from the IPO, while the rest of us have lost 97% of our investment at the present price of £0.042p, with the prospect of that going to below a penny. And we never did find out what happened to Luke Burtis' holding and whether he sold or not. Thanks a bunch Nik.
Pearls....it is Frasers selling the puts, not ASOS. Frasers are continually benefiting from these sales all the while the SP is stabilising around the £3.75 - £4.00 mark. The shorts are some of the hedge funds buying these puts thinking it will go lower. Up until now, the 'bid' speculation has kept the SP above the strike price, or thereabouts. If Asos drifts downwords in the next few weeks, Frasers may be obliged to buy the shares above the market price. That may not bother them if they intended to buy them in the first place. They, in their view, are onto a win/win situation if they think the long term prospects are encouraging.