Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Good to see him return. He retired from Restore in 2019 to pursue other interests having spent the previous 10 years with the company as CEO. Must know it inside out, apart from the calamitous last couple of years when he wasn't present.
I take with a pinch of salt the company statement that they pursued a new CEO through an Agency to find the right candidate. Clearly if he was available, I would guess it was a basic chat to say 'fancy coming back to sort out the company again'? I suppose they had to goes through the formal process as a matter of protocol!
SCB One has to befar more analytical than to simply say online sales are surging and that the high street is struggling. That's far too much of a generality.
One only has to look at the likes of SportsDirect and Primark to see that some have the expertise to exploit the high street market. They've adapted, and so too does Boohoo have to in order survive in an incredibly competitive high volume/ low margin sector.
Obviously this may be just a blip due to the high inflation, and the dismal summer , but if you breakdown some of the BRC figures in terms of online / high street / non-food sales, you will see that there has been a consecutive decline in 'online non-food sales' in May - 3%, June -1% , July -6.9% and August -1.7%. So hardly surging.
I see a decline in overall revenue of about 10 -15% for Boohoo but with better effeciencies coming through which will see the company into better times. Long term, I see quite a bit of consolidation in this sector. Only a guess, but I don't see Boohoo around as an independent in five years time.
Itmustbeluck: There was an issuance of shares (equivalent to an extra 19.1%) in the May placing. Look at the RNS's.
Therealegogo: Aktieselskabet / Povlsen / Bestseller ......they are, to all intents, the same person.
Povlsen's long term strategy has always been to hold at least 25% of Asos.
Thanks Barkils. So the 'updated trading statement' will be planned for the 19th September (a bit later than last year), meaning probably that the 'end of year results' will be about a month later.
It looks like the shorts are hoping for another bite of the cherry. At 5.54%, a lot of the big players clearly hope for a disappointing update in a couple of weeks, resulting in a dip in the present SP.
'Non-food online retail sales' have had a poor time over the last three months due to the bad summer. The onus is therefore on Asos to have achieved their objectives in cutting costs as outlined previously. If they have, then then this could offset the sales decline, and shorts could end up in a pickle.
Therealelogo: I concur with all you've said. MF can be the kiss of death, but the article just tells us what we already know. Asos has just begun to turn the corner having had been run badly for quite a while. That doesn't mean to say it's out of the woods. Hence that is why Ashley is sniffing around. He's playing a game whereby he stands to benefit if the company continues its progress, but conversely, he is waiting to pounce if it all doesn't go to plan. He's an opportunist, a gambler, and also unpredictable. That's why he's disliked in the city. Morgan Stanley didn't want to deal with him and so offered onerous terms. And so he's suing them! He's gone to HSBC to get his deravitives facility, secured by his Frasers shares. Interestinglyy, he's not been using derivatives to buy at Boohoo, but scooping up surplus shares. Personally I've never liked the operations of Boohoo, ever since reading a critical and very detailed report of the inner goings ons of the business. It wouldn't surprise me at all if the founder tried to take it private, to the fury of smaller private shareholders.
Ahananda....Those 'put' figures have since changed. See the updated ones on RNS 25th August.
Turtleneck. I'm a little confused now. On the basis of what Smugger said, it would seem the conclusion would be that MA's physical shareholding would increase this month and the deriviative figure reduce by the same percentage. I'm not sure that situation is going to happen. Maybe I've misinterpreted his post.
Turtlehead : Agreed, You explained it better than me. I saw this brief definition at investopedia :
''Selling puts generates immediate portfolio income to the seller, who keeps the premium if the sold put is not exercised by the counterparty and it expires out of the money. An investor who sells put options in securities that they want to own anyway will increase their chances of being profitable''
I've been looking at Frasers' derivative dealings on Asos :
1. Sold put option, Expiring Sept 2023 % of Voting Rights being 1.958. 2. Sold put option expiring Oct 2023 VR 4.642% 3. Sold put option expiring Nov 2023 VR 1.2018% 4. Sold put option, expiring Dec 2023 VR 0.8386% 5. Sold put option Expiring Jan 2024 VR 0.0922% . These were mostly tranacted in Jul & Aug when the SP was under £4.
I believe this indicates MA is fairly bullish on the share. As the SP goes up, the happier he should be as he, potentially, has the opportunity to own the shares at a future date at a lower cost base. It's interesting that the highest 'sell put' contract of 4.64% expires in October which, coincidentally is when their year end results are due. Make of that what you will.
Thank you Knowbody. I appreciate your comment.
In the past I have sold at the bottom (not Asos) and regretted it. I've averaged down to approx £7.50 and think that is now a good bet to at least recover my losses. And if there are continued signs of recovery, the momentum will hopefully see the sp go beyond. And if there's a t/o approach even better. That doesn't stop me being somewhat apprehensive leading up to any update and the results. As you know, I personally take more notice of the shorts than others do, because more often than not, the big players make a big living out of it.
PS....the greener pastures have alluded me recently. There are not many individual shares I would care to take a bet on at the moment.
Ahananda : What part of my last comments are BS? Please elucidate. By all means state a rational opposing view, but please do not come back with simply an abusive comment because my views don't match yours.
Given that Asos is presently, under declared figures, the highest shorted share on the stock exchange, I respectfully suggest that quite a lot of informed shareholders are, to say the least, a touch worried. I don't call that BS.
I don't see anything heating up in the 'short term'. Declared shorts have been steadily increasing over the last few weeks and are now at a worrying 5.35%. This can only mean that those hedge funds, rightly or wrongly, believe that there will be a disappointing update in the next couple of weeks, or that the end of year figures due to be announced in the second week of October, will be lacklustre.
Expect more volatility over the next month with the SP only being supported by the t/o gossip. The question is, do these hedge funds know anything we don't, or are they all acting on a hunch or following each other like lemmings?
The three main shareholders, by the way, don't give a fig about short term volatility. Each of them have their own medium to long term agendas. I'd love to see the precise details of Fraser' put derivatives though. That would be quite revealing.
The manoevering and and other speculations at Asos can only be good news for Boohoo's SP. The t/o fever might spread here! With Povlsen in the driving seat as a major holder in Asos, MA may well turn his attention to here, and up his stake further. It's worth remembering that I think nearly half MA's holding in Asos is only by way of 'put derivatives' whereas his holding here are I believe wholly owned. One thing you can say about MA. He is predictable in being unpredictable.
I mentioned on Friday (25th) that this increase in holding by Polvsen was a distinct possibility to strengthen his position and return the holding above 25%. His subsidiary had long maintained that they intended to hold in excess of 25% as a long term strategic partnership. They're simply back to a similar percentage holding to what they were a some while back. Polvsen is a smart cookie and is no doubt keeping a very close eye on MA.
In terms of the share dealings in Asos (and indeed other shares) I have long lost faith in the accuracy of the daily quoted dealing one sees on the usual stock exchange sites open to the public. In my view, these massive transactions are often undertaken out of sight between brokers/intermediaries. All too often their is a lack of transparency.
MA is buying here for the same reason he's buying into Asos and other retailers. It's all part of his strategy to have a finger in every pie.. For the most part, at these prices, it's a win/win situation. More to the point, shareholders should keep an eye on the famiy owners and their holdings. In my view, if they feel the SP continues to disappoint and doesn't reflect the true value of the business, eventually one day there will be an attempt to take it private which will really p**s off long term small shareholders
It's interesting to see that Povlsen, and Willam Barker (Camelot hedge fund) holdings are, for want of a better expression, 'wholly owned physical shares'. Camelot has been mopping up a few from the market recently to up their interest to about 14%. I believe Polvsen has a holding of about 22% . However Frasers' (Ashley) is officially only the third largest overall 'share holder' at 10.6% but also holds about an extra 9% of voting rights through derivatives. Basically he (Ashley) is borrowing them. At some point I imagine these derivatives will need to be unwound or extended. As with his other holdings in various companies, Ashley likes 'influencing' and a say in the way a company is run. However, he is not normally one to make a takeover bid. On the contrary, he prefers to pick up companies on the cheap (often when they're in a distressed state) or alternatively by benefitting from any early signs of a turnaround. It will be interesting to see how this one plays out. All the while this manouevring carries on, the SP will be propped up by the t/o speculation. I wonder whether these developments will expose any other predators that are waiting in the wings that have not yet shown their hands. Or will Povlsen, a long term strategic partner, try to up his stake. He is said to be keen to keep Asos as an independent entity. There is no love lost between him and Ashley. The press should be all over this over the weekend!
I anticipate an update from Asos around the beginning of the second week of August once they have assessed their August sales. Final results are presently due on 12th October.
With another one entering the fray yesterday (Shadowfall), the hedge funds have already signalled their view. I know a bit about Shadowfall and that adds to the nervousness of the next few weeks.
Personally I don't see this as a time to buy in order to average down. An opportunity to buy lower is probable in my view.
I stand by my comments of the last couple of weeks despite the unpalatable short-term undertones. Having said that, I repeat my opinion that this is a medium/long term recovery play.
Knowbody: Maybe I mention this aspect too much on here. But nevertheless it is, more often than not, a very simple key indicator. I say it as I see it. I'm still holding for recovery in the medium term. I'm not trying to influence the sp downwards. I'm still in for the medium term to at least break even, but live in the hope that the present t/o interest comes to fruition.