Member Info for simon1367

I am very nervous about this company. I'm holding at an average of about £8. I regret investing. The only hope of getting my dough back short term is an unlikely takeover. The only positive sign has been the reduction generally of shorts although this is largely due to unsubstantiated takeover rumours.

My main fears have been confirmed by Allianz Trade, a leading insurer withdrawing cover entirely.

Numerous suppliers are not delivering stock "as insurance has been lost" and there are fears that earnings are sliding at the company. On that basis are we to assume that revenue is down when they report later in the week? And have they stopped the surging returns? And what about any more write offs of stock? And the future renegotiation of a 0.75% £500m bond in 18 months? and etc etc etc ...I could go on. A lot of future hurdles.

Someone at Asos says ''While trade credit insurance cover has been tightening across the retail industry, we have seen no impact on our trading." Is this another misleading statement? All the signs are that consumer spending online in the last few months has declined to it's worst position on record, so that must include Asos and is not good news. I'

I'm sorry, but at the moment, I can't see where any profit is coming from. With so many challenges, I'll be lucky to get my money back in the next two years. I'm just crossing everything in the hope that this is bunch of incompetents have pulled off a miracle.

As for the big shareholders, why would any of them put in an offer of even £1billion, when they all see, in different ways, a bargain ahead of them through either a debt for equity swap or a buy out through administration?

I'm having a large night-cap.

If you're talking about their statements concerning the new Financing Arrangements & Equity Raise on the 25th May, then lets just say they put a substantial positive spin on their apparent achievemnt in getting facilities to see them through a difficult period. What they didn't mention was why they went to what I regard as a bit of loan shark owned by a notorious hedge fund. Naturally, they couldn't put it in such terms. So yes, one could argue we have been misled.

I have a big concern re a debt for equity swap. That would suit a number of big players. I believe things are worse than the company are making out. I believe they are being disingenuous. They are already in trouble even before the other challenges ahead of them. I await next weeks update. I hope my fears are unfounded but, based on past performance from these clowns, my gut feeling is there is more pain ahead of us.

Knowbody youknow.....which ones in particular? I'm not saying I have a 'theory'. I just try and cut through the bs and waffle we've had from these muppets for the past two years. And look where we are now.

Barkils ....to clarify, the 3.3% drop in online sales was over the whole retail sector, not ASOS. Asos are suspected to have fallen by more given that the previous report they made showed much lower revenues in the UK. And of coourse the 'returns' fiasco continues unabated. Unless costs are slashed, I cannot see where 'profit' is going to occur. Any rise in revenue is meaningless unless the better margins are there with it. Unless we see good news next week, this will definitely fall below £3....Ashley will lose money short term but if things do go pear shaped, he will be in there trying to pick up a bargain. And believe me, that is not necessarily good for small shareholders like us.

Celtic007 Coincidentally, your post made me laugh. ''...in case new management mess it up, which am sure they wont''. I really do hope you're right.

However most of these guys are not new management and have messed up consistently, hence this growth stock (Lol) has lost 94% of it's SP in two years. Meanwhile CEO Calamonte who was promoted from within is on an annual remuneration of £636k. And we are presently on yet another 'interim' CFO. We then have a refinance arrangement with an exhorbitant interest rate agreed by a company associated with vulture hedge fund Elliott. This was because their lead bankers quite rightly wanted covenants in place to renew a higher facility.

With overall online sales down 3.3% last month (due to consumer weakness) , the worst on record, one has to question whether there will be any profit all all this year. Sorry for the negative comment but sometimes the truth hurts. This management is out of it's depth and in my view a fresh pair of hands is required.

On the back of bad retail figures, shorts are starting to increase again which is very frustrating and worrying.

The news that retail sales have slumped for the first time in two years, is bad news for the likes of Asos and Boohoo.

Online sales generally fell by 3.3% last month, one of the worst set of results on record. Analysts predict further pain as interest rate rises begin to weigh on consumers.

I just cannot see how the update from Asos next week is going to be 'good'. Any cost savings achieved, as far as I can see , will be countered by all the economic woes being experienced by consumers, and the recent costly refinancing . This is why the shorts have increased today. They continue to manipulate this share. It's only the rumour of takeover that has been buoying the sp. As I said yesterday, any hint next week of a slow down in progress will result in another big percentage drop. The dilemma for many will then be, do they average down any more.

Shorts gradually retreating ....now 2.28%. Now way down the league of being one of the most targeted. Even the likes of Sainsburys and Hargreaves Lansdown are more shorted. And one of their main rivals Boohoo is at 4.90%.

I see this as a definite positive. The company's vulnerability is attracting the eyes of big competitors and the vultures.

I reiterate, I don't see the update next week as being particularly good, although the present top management will dress it up to look encouraging. They of course are out of their depth.

I just hope sales don't deteriorate. Any sign of lower revenue and more stock write off will put pressure on the SP. Last weeks capital raise was, imo, insufficient. I fear that without an actual bid from someone, there could, later down the line, be a debt for equity deal which could screw smaller shareholders.

I'm encouraged by the gradual reduction in shorts 2.31%, notwithstanding there are some below the 0.50% disclosure level. It's a good indicator that some of them are getting jittery on this share and see better prey elsewhere.

I see the update next week as being merely a holding statement indicating matters are proceeding satisfactorily and that they are confident of meeting their end of year aims, or nearly so.

My view is that they are not going to reach profitability as quickly as envisaged. The recent placement and refinancing arrangements will add large costs and will adversely affect the bottom line. It's precarious given the huge challenges ahead (details I've highlighted before) but the rumours are keeping the shares steady around the £3.50's.

Any murmur of continuing bad trading next week will see this drop another 20% imo. MASH is in there to ruffle feathers of the big two shareholders. He's onto a win/win anyway. He can either carry on with his strategic aims with Asos (recipricol selling deals etc suit both) or alternatively, if things goes wrong, getting the company for peanuts if administration looms, or if a big boy enters the takeover fray, he makes a tidy sum from the sp increase!

There are many 'wishful thinkers' on here today perhaps being too hopeful. Plucking potential SP figures for next week out of the air serves little purpose. This is still a company in a precarious situation, hence why it felt the need to go to a specialist lender attached to a predatory hedge fund. Its done this at high cost to avoid having to adhere to onerous covenants from their normal corporate banking lenders who quite rightly saw them as high risk.

It is hardly surprising that bigger concerns are sniffing around at this relatively low valuation. The likes of any of the names muted are hardly likely to offer much of a premium. I'm not saying that an offer won't materialise but I think this is in danger of being over-hyped. I sense that any further approach may be a bit further down the line when the excitement dies down and when the company issues another profit warning.

Meanwhile, if the company confirms the December approach but says no further discussions have taken place with anyone, or are planned, we know where the SP will be heading again.

Paulleydee.....I tend to agree with you. The price is bound to increase in the morning.

The big article I read in the Telegraph today was very interesting. Mike Ashley, and indeed Schroders were left out of the loop with regard to the recent refinancing and must be fuming.

The Asos management were seemingly intent on leaving Frasers (Ashley) out of the equation. The top two shareholders Povlsen, and Californian Camelot were given preferential information as to what was happening.

What I find annoying is that the big Hedge fund operator Elliott has been pulling the strings. They control / influence Bantry who did the refinancing. That refinancing comes at a massive cost (£45 million in the second half of the year). two)......given the consultancy fees and the ridiculous 11% interest rate.

There is speculation that if it all goes pear shaped later in the year, that Elliott will simply do a debt for equity deal with Asos, thereby screwing the small shareholders.

I'm not convinced that Asos management have the best interests of the shareholders in mind. They've favoured a vulture in hedge fund / shorter Elliott. I know Ashley is no angel either but at least he is in favour of building the brand and his empire rather than short term opportunism.

Either way though, it is pleasing the price will be moving in the right direction.

People are getting excited by the rumours. If something comes to fruition, I do hope the small private shareholders don't get screwed by some sort of debt/equity swap. That could happen if things are worse than we know about.

Some of the so called experts commenting also don't seem up to date with events. I was mildly amused by the MorningStar guys assessment on 2nd June when he said that Asos was 'the most shorted' share on the Ftse. Erm....maybe a couple of months ago mate, but at the time of his video it was down to 2.81% and about seventeenth in the league. Okay there are a few lurkers under the 0.50% level, but it is nevertheless abundantly clear that Asos was not the most shorted when he was giving his readers this inaccurate information.

This could be the beginning of the shorts moving away, having already made their millions. The current figure of 2.88% (as opposed to over 5% for many months) looks very promising but is a bit misleading given there are some shorters just below the 0.50 level which do not have to disclose. Nevertheless, this will definitely become an interesting play if the figure continues to reduce over the next few weeks.

I remain of the opinion that they have to change their returns policy to stop the rot emanating from TikTok. A policy of allowing someone to return a package for free, say up to three times in any calender year, otherwise a fee of £1.99 per item kicks in, sounds entirely reasonable to me. Nearly everyone else charges. It would be interesting to know just how much this is costing the company. They say £6 per return, but what are the numbers? If it was 20k per month, then they might argue its only approx £1.5m per year. If its 20k a week playing the game, then we're talking £6.25m per annum. Introduce £1.99 for everyone, then we're talking of big savings. It's a no brainer to me but clearly the top management seem fundamentally opposed to it.

The share price has been drifting down following cautious statements of late. In my view this is a well run company where its services will continue to be in high demand. The P/E ratio is too low given the potential. I remember Jim Slater some years back saying that it ticked all the boxes, had good people running it, and it would only be a matter of time where there would be significant growth or a takeover. I think this is a good entry point. I'm investing now and tucking away for a year or two.

BooHoo are down 0.79% today. Asos down over 7%. This is all down to the market's view of Asos's recent inadequate placing. CEO buys today, which is a bit late to express his confidence. Maybe he sees a bargain or maybe he's just trying to prop up the share. What a disaster for most shareholders, down 92% in two years. Ashley is no doubt biding his time, waiting in the wings, ready to pay peanuts.

Returns was already an issue but was built into the business model as something they could tolerate. Customers understandably return items that are not quite right for them or don't fit. However, the present situation is as a result of a different phenomena. It has little to do with the cost of living. Firstly, people are buying items for special one-off occasions and then returning them a few days later. They are taking the mickey. Secondly, and even more of a problem is the game being played by young people on media sites such as TikTok and Instagram, whereby they order loads of items every week and pose in the clothes with a view to getting votes as to which one to keep, the remaining 90% being returned. This is a 'massive' fad on social media and costing the company loads. The only way I can see them stopping this is to either identify and ban those who are doing it (which could alienate many from buying anything in future) or introduce a reasonable returns fee.

Very interesting little news item in the Telegraph on Friday. I know the corporate actions have already occurred but this adds meat to the developments. I'm unable to provide the link but this is a precis:

'' Struggling Asos has turmed to Elliott Advisors amid a surge in shoppers frequently returning purchases. Asos say that Bantry Bay, a London based fund backed by the Wall Street investor Elliott, has agreed to provide £275m of banking facilities. This replaces its £350m revolving credit facilities with banks that was due to expire in November2024.

The new facility provided increases flexibility against a challenging macro-economic backdrop and the stability to focus on long term value creation. It comes as Asos battles to turn around its operations and struggles to stop shoppers from returning items, where it is costing the company £6 for each return. While larger orders are being made, some customers are automatically returning up to 90%. Elliott advisors employs about 500 people and, in the past, has taken stakes in UK firms such as GSK and Taylor Wimpey, where it has called for sweeping changes in the management, together with sell offs''

It is the last sentence in that news item that caught my eye the most.

We presently have an SP around 2% lower than the placing price. Not surprised. The three large shareholders stumping up the bulk of the cash didn't really have much choice. It was either that or intimating a lack of support. Lenders were insisting on this corporate action otherwise the new facility would not have been forthcoming. And, as I said last night, the borrowing is at a high interest rate through a 'specialist' lenders. Presumably their lead bankers Barclays, Lloyds and HSBC didn't want to know....(too much risk).

At least this will see them through this year. As I commented yesterday, even if sales and profit margins improve, there will be further financial pressures over the next two years what with the Bond reneg and the higher interest rates eroding the bottom line. However I'm comforted by the fact that the major shareholders, by the looks of it, are in there for the long term, including Nick Sleep's company. MASH remains in the background too and might be laughing this morning. He will buy more at a cheaper price.

The market has been fairly neutral on this action. This remains a good long term bet. However if there's bad news in the reporting season later this year, I think it will be curtains for the CEO who, to my mind, shouldn't have been promoted from within in the first place, given the management's sloppiness over the last two years.

In terms of the private investors placing of £5m, this is mere tokenism. I notice Lloyds-Iweb have still not announced a 'corporate action' even though the offervfinishes mid afternoon. Obviously mad to take it up anyway given the market price. I expect there will be some not savvy enough to realise. They will all be taken up, and if not the underwriting shareholders will take a few more!

Pauleydee,,, with respect, I disagree. This type of arrangement doesn't take place overnight and had been in the making for quite some time. It definitely implies that someone within their lending arrangements insisted on this raising of additional capital in order to agree the continuation of ongoing facilities and to strengthen their position. The two biggest shareholders , together with Nick Sleeps investment vehicle, had to underwrite this in order for the company to move forward. It just shows how critical a situation they see the coming months ahead. Lets hope for everyone's sake, it is a sufficient amount. The high interest rate will hit profits. Asos must re-model itself successfully this year. It faces an uphill struggle for quite some time given it still needs, as far as I can see, to renogotiate a £500m bond in a couple of years time. Presently the bond pays out 0.75%. Based on the new borrowing facility being 11% , and that base rate is predicted to be around 5% for quite a while, that renewed bond rate could put a lot more pressure on profits. Sorry to sound gloomy but this is not going to be a quick turnaround. However the market works in mysterious ways and might well see positivity in their capital postion being strenthened albeit for the short term.

...........and I forgot to mention the finer details - --- 11% interest on the new borrowing facilities....that 's a huge hit, and reflects how the specialist lender regards this as fairly 'high risk' . It will be interesting to see how the market reacts in the morning. I also can't see how brokers will be able to communicate to all their small shareholders in time (and get a reply) re the tiny £5m placing for them.

This is what I said just over a week ago:

''CEO's normally caveat their answers re cash raising with the quote, or something similar like, ''there are no present plans''....or ''at this time'' there are no plans for a rights issue. Then come next week, blow me down, there is one! ''

We've basically had a raise in capital. Never believe a word a CEO has to say, particularly this one, when asked if they need more money. To be fair to him though it would have been difficult to announce at the time, especially if it hadn't been fully agreed then.

The only good news is that Nick Sleep is entering the fun (I.G.Y. Limited is his private investment company). He's a shrewd investor and looks long term to make loadsa money.

The bad news is that I think there will be an element of dilution in this financial restructure to the benefit of the large participators, but to the detriment of small shareholders. I hope I'm wrong.