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Chilting -

Ocado - 7% drop today versus an only a slightly down nasdaq.

That's very unstable...

Bayobach, the market conditions for Ocado retail are extremely adverse. Ocado retail have already reduced their sales guidance twice this year. I expect another reduction in the coming months.

Ocados fundraise was far earlier than the market expected indicating the probability that costs are ramping up quickly at Ocado group. There were many issues surrounding the fundraise which I raised in an earlier post.

There will be further drops to this share price imo.

Ramping up renewable energy is a good strategy but it will take years to do so meaningfully.

The oil and gas price will oscillate but stay at historically price levels for the foreseeable future.

Bleak winter ahead imo...

Credit Suisse cuts Ocado to 'neutral' (outperform) - price target 960 (1,600) pence

Yes, gas has shot up after the war. That's been a huge shock to the economic system across Europe and beyond caused by the war.

Very interesting times. One thing I think it would be foolish to count on is the Ukraine war ending any time soon..

@bayobach

High oil prices are only part of the macroeconomic issue caused by the war. Higher oil prices need to be looked at in conjunction with much higher energy food and energy prices. These two factors have risen far beyond most predicted in Jan this year. It's caused a huge shock to the global system.

It's easy to say with hindsight looking at your graph however it was far from the majority view in January that oil prices would be as high as they are today with every indication that they will stay at historically high level for many months to come..

That's your guess Pokerchips. Many, many "professionals" make incorrect investment decisions daily....

@ Pokerchips

The market greatly underestimated the wars potential to boost inflation across the globe for a prolonged period. Many thought Putin wouldn't see things through.

Of course there were some who thought oil prices would go far higher and that inflation would soar but the great majority have not foreseen the macroeconomic environment we find today.

@SFH300,

Ok, so no sources. Very few in January were predicting the current ongoing very high inflation we are experiencing. Of course it has been the black swan Ukraine war that has driven what was thought to be temporary covid bottle neck supply chain inflation into enduring inflation at a much higher level.

It's taken many by surprise and has, and continues to, spook the market.

@chilting

The oil price is oscillating. The price is still stubbornly high Market now pricing in an increasing recession probability. Personally I see these recession risks increasing over the coming months with oil remaining at a historically high level.

SFH300,

"plenty of media pundits predicting a doubling by summer" any sources for this info? It wasn't a widely held view at the time..

That inflation figure is incredibly high. A figure that would have been laughed at by all if you predicted it in January.. The economic environment has changed incredibly quickly

Cheers SFH300,

Looked into this more. Those 3 investors have taken part in the placing and bought new shares rather than sold shares.

Very poor reporting by Proactive. I reverse my earlier comments re this issue.

@pokerchips

My typo - "You are more bearish on the macroeconomy than I"

Should have read you are more bullish....

@pokerchips,

As mentioned, the pace of the feds current interest rate rises is certainly very rapid. You have to dig deep to find a similar move back in history.

Some companies will have foreseen the scale of the interest rate rises. Some though will be caught out.....

@ pokerchips - I think you'll agree though that " Rapidly rising interest rates " is not dramatic language given that the feds current moves have very few precedents historically.

You are more bearish on the macroeconomy than I. For me there's more to come re the current macroeconomic slide as I've outlined at length with you before.

Time will tell. Best of luck re your investments.

@pokerchips. The language reflects the reality. There are very few other instances in history where the fed has hiked rates by 0.75% and indicated the same move could be repeated the month after.

It's not that interest rates are high. The issue is that companies interest rate forecasts were far lower and they positioned accordingly. The black swan event of the Ukraine war has caught many out and will ratchet up further the negative macroeconomic environment..

A crucial part of the placing for Ocado was that they were able to reassure those buying shares that they are standing by previously issued guidance for Ocado retail and Ocado solutions.

Those taking part in the placing had the reassurance from Ocado that current trading hasn't deteriorated from previous results guidance releases. Had Ocado undertaken the placing and also advised current trading had deteriorated further then the placing purchase price would have been very low and the Ocado share price would have tanked more than it had done today.

I believe Ocado have pushed through this placing as they believe trading may deteriorate in future, due primarily to greatly increasing costs, and that at that point the placing would have to be at a far lower price. So they can raise more funds now, later on the fund raise would raise less for the same amount of placing shares. Overall the rapidly rising costs are pushing the need to raise more funds

@ chilting

We are nowhere near the end of the current economic downturn. When investors grasp this further falls will occur

@bayobach

The discount was big so to attract new investment. The timing of the placing is very interesting. Imo Clearly points towards the view that costs are rising very fast for Ocado currently.