Member Info for Wibblewobble1

Both ASC and BOO have similar business models valuations and problems. Its a shame one or other of them isnt flying high with increased turnover leading to exponential profit growth. At least then it could be said the business model was a success and the other could ammend and tweak to copy that success....as it currently stands the business model has failed with both clocking 80%+ share price collapses......and the recession hasnt even started yet.

Having mike ashley buy a holding is like having a vulture on your shoulder waiting to pick over your corpse

And before someone says its assets are worth more than that i would point out the firesales into a recession can reduce asset values to a fraction of what may be hoped for

Companies over the last 10 years have flattered to deceive. Governments printing paper created swathes of money seeking a home. It became the perceived wisdom that high growth became as valuable as profits which would surely ( according to perceived wisdom) follow. Boo and asos were amongst the companies to benefit from this new wisdom with share prices spiking to irrational highs. 2021 the market did one of its flips, the cash taps dried up and the market reverted to the old truths of profit being king, debt being the enemy, profit growth being rewarded. What is the new fair value now irrationality has gone, the market hasnt yet decided hence the short positions havent closed. The only way for boo and asos to recover old highs is if either the government's open the cash taps again or if the two companies not only become profitable but become profitable to such an extent as to justify multi billion pound valuations......as the markets havent yet decided on a fair valuation and swings always go to the opposite extreme i see no reason why boo doesnt fall to a 150 million valuation (14p).....as to them going bust well thats always an option if badly managed and failing to produce a profit, time will tell

Only to add, long term shorts close when there is a reason. The company goes bust , the company recovers and prospers aka apple as someone mentioned ( it was shorted because it was going bust not just because of jobs), because sentiment changes and growth but loss making companies are highly valued again or because of freakish events like gamestop where a piddly going bust minnow has a bunch of irrational private investors take down a billion dollar hedge fund.

People talk about shorting as if its a self fulfilling prophesy, you borrow shares, short and the price goes down. Actually its far from that simple, its like saying you buy shares therefore the price must always rise. Ideally to short you need a sick company within a falling sector ideally within a struggling/falling market. .....against the short position is the prospect that those long can simply buy more stock and cause unlimited losses. Hence shorts are very carefully selected and those most heavily shorted must have real and evident problems to justify a long term position, Anyone can short a situation but to hold it long term you need facts not hope.......i watch with amusement on this and other threads the continuous refrain that its the shorters to blame, its not but its a sick company facing continuous selling. Short positions are a symptom, not the illness.

As to sub 50 or 60+ then given its track record it could do both in a few days hence it makes a decent trade if timed correctly

I could do with a spike down to the low 40s to buy for a twist.......but equally it could bounce off 50....or just stagnate until update.

I dont think people will migrate down to boo. I actually bought a selection of their clothing to see for myself. The quality, materials and finish are all appalling. Its no wonder that returns are recycled and charity shops dont want them. They make primark look like the new m&s. Given that reality i think people will be less not more likely to buy wear once disposable clothes.

The problem is regardless of what happens over the next day or so the recent months have seen the end of free money with interest rates doubling, doubling and set to double again. This makes the debt pile unsustainable with no amount of reasonable income from the business able finance the debt. In addition removal of free money from the equation makes refinancing an impossibility..... So with the future for the company valuation looking so bleak a story about the company going bankrupt is apt, be the whole or just a glimmer of truth......as to your position you may have choices left depending on what the next RNS says but even if positive its hard to see a future for the company.

Boo level of bad luck/incompetance is staggering

Missguided or boo, its like comparing which dog has the most fleas. As to obtaining a credit facility, cash was flowing without end to anyone who asked. I would however like to see the terms in these days of rampant inflation and rapidly increasing credit costs.....boo flew on the dream of soaring turnover and matching profit. It never came to pass and now has fallen to earth, personally i dont see it surviving but thats for the future, hopefully thete are a few more trades to be had. After spending two years trading BP, its a novelty here and fun.

Sadly boo suffers from a failed business model...near first mover advantage and ever increasing turnover was supposed to lead to a profit bonanza...sadly the model didnt work and costs plus ever increasing competition has demolished the sp . The issue now is if survival is possible or heading into a nasty recession will they simply fail. Future may be glum but still trades to be had, was looking at 53p or near for a bounce but then they stupidly frittered much needed cash on another busted business....still, even the biggest dog has a few moments in the sun. On shorting, a large position is built on the assumption a company is going bustand boo is a leader of the pack.

So dog buys dog

https://www.dailymail.co.uk/money/markets/article-11110891/Short-sellers-aim-Asos-Boohoo-greenwashing-probe.html

https://www.theguardian.com/money/2022/jul/16/buy-now-try-later-online-clothing-sales-boom-raises-qualms-over-returns

https://www.theguardian.com/business/2022/jul/15/uk-shoppers-fork-out-almost-20-more-on-clothes-than-last-year-as-socialising-returns

https://www.dailymail.co.uk/news/article-11007931/Its-make-weep-Boohoo-axes-free-returns-charges-sending-clothes.html

Does an investment piece stressing the importance of good governance, then uses boo as an example of bad governance.

Down 33% in 5 months. BOO's problems are deeper than that but no chance of a sustained rally until the retailer sector eventually trends up imho