cwah
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Post by cwah on May 19, 2019 12:13:45 GMT
Hello guys,
Thomas cook has plummeted by 40% of its share value and is valued for potential bankrupcy.
I've decided to buy some share hoping to make some quick buck on it.
Some points: - they have enormous debt (£1.2 billions) and their balance sheet doesn't look nice -£300M for Y2018. So they are currently bleeding money and may continue so for months to come - but they have a profitable airline which they intent to sell and should sell. - they are looking to have additional bank funding facility of £300M for winter season - there are bidder to buy the holiday and airlines part. It's a very famous brand and it has value in it
So I put £5k on it. Anyone else did?
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registerme
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Post by registerme on May 19, 2019 12:23:04 GMT
Brave punt. I suspect you'll either make out like a bandit or get wiped out.
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adrianc
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Post by adrianc on May 19, 2019 12:43:20 GMT
Some points: - but they have a profitable airline which they intent to sell and should sell. - there are bidder to buy the holiday and airlines part. It's a very famous brand and it has value in it You're interested in buying the airline - or the brand - or any other assets. Do you buy now, or do you wait for the administrators to sell them?
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cwah
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Post by cwah on May 19, 2019 12:50:09 GMT
Some points: - but they have a profitable airline which they intent to sell and should sell. - there are bidder to buy the holiday and airlines part. It's a very famous brand and it has value in it You're interested in buying the airline - or the brand - or any other assets. Do you buy now, or do you wait for the administrators to sell them? If I was the only game in town, and i know the company is going to be bankrupt, then I'll wait for administrator to come. But if I know the company will receive cash to keep trading for a sustainable amount of time, and that there are other parties interested, I may decide to buy shares and do a takeover this way.
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adrianc
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Post by adrianc on May 19, 2019 12:51:09 GMT
You're interested in buying the airline - or the brand - or any other assets. Do you buy now, or do you wait for the administrators to sell them? If I was the only game in town, and i know the company is going to be bankrupt, then I'll wait for administrator to come. But if I know the company will receive cash to keep trading for a sustainable amount of time, and that there are other parties interested, I may decide to buy shares and do a takeover this way. Such a nice word, "If". One of my favourites, along with "should".
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iRobot
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Post by iRobot on May 19, 2019 12:54:09 GMT
Hello guys, Thomas cook has plummeted by 40% of its share value and is valued for potential bankrupcy. I've decided to buy some share hoping to make some quick buck on it.Some points: - they have enormous debt (£1.2 billions) and their balance sheet doesn't look nice -£300M for Y2018. So they are currently bleeding money and may continue so for months to come - but they have a profitable airline which they intent to sell and should sell. - they are looking to have additional bank funding facility of £300M for winter season - there are bidder to buy the holiday and airlines part. It's a very famous brand and it has value in it So I put £5k on it. Anyone else did? Not of interest to me as investments (or 'punts') go, but curious, so: Do you have a target price to sell at if it rises? Do you have a target price to sell at if it falls? (Or would you buy more if it falls?) How quick is 'quick'?
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iRobot
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Post by iRobot on May 19, 2019 12:59:58 GMT
You're interested in buying the airline - or the brand - or any other assets. Do you buy now, or do you wait for the administrators to sell them? If I was the only game in town, and i know the company is going to be bankrupt, then I'll wait for administrator to come. But if I know the company will receive cash to keep trading for a sustainable amount of time, and that there are other parties interested, I may decide to buy shares and do a takeover this way. From the Grauniad: "The firm’s lenders have so far agreed to inject £300m of new funds to see the company through next winter but this is contingent on the firm making progress with the sale of its airline business. Lufthansa has said it put in an offer for Thomas Cook’s German airline Condor, while Virgin Atlantic is reportedly interested in the long-haul business."Seems like TC already have a gun to their head (implication is no further funding unless airline is sold) and it would appear there are already interested parties. Maybe they feel the situation is 'distressed' enough without waiting for Administration (if it comes to that) and don't want to lose the opportunity to a competitor.
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cwah
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Post by cwah on May 19, 2019 13:17:05 GMT
So I don't have target for sell or buy. I don't have a stop loss either. I'm expecting a bounce at some stage, I may want to limit risk and take profit at £0.20/share. Or if they manage to sell the airlines at good price it will go much higher and it would go over £0.40-50/share.
From their shareholders meeting, the finance officer confirmed verbally that the £300M loan is not subject to the airlines being sold. However they'll do an asset review like any loans/mortgage as part of the standard procedure. It sounds like this Citi analyst went too far saying its dependent on the airlines being sold (or that the finance officer lied)
This abrupt loss came from this Citi Analyst James Ainley who publied this news 1 day after the half year results. When the results were published, the stock dropped by 16%. But 1 day after, this James estimated the stock was worthless which plunged the stock by an additional 40%.
I'm thinking that there is some over-reaction from 1 analyst and bad market conditions. So I took a punt.
I'm also thinking that they are quite in a unique position of being a famous travel agency. It's way more popular than a Debenhams or a Flybe. It has fundamental market value and just need some funding to keep trading during tough(er) time. I'm hoping they'll give a confirmation soon of the funding for Thomas cook, so that it calm down the market.
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adrianc
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Post by adrianc on May 19, 2019 13:36:13 GMT
I don't have a stop loss either. I suspect if there is a loss, it will be 100%. Maybe it will come good - fingers crossed for you. The problem is that "traditional" high street travel agencies aren't what they used to be. The internet has hit them VERY hard. If you wanted to go somewhere on holiday, you're as likely now to just look at independent accommodation and flight websites and just assemble the bits yourself. Their brands are just a bit stale. They're big, sure - not that that ever stopped anybody going under - but they're only half the size of TUI. And debts of about the same amount. www.bbc.co.uk/news/business-48308001The share price is lower now than at the depths in 2011/12, when they only just held on after a massive restructure.
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cwah
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Post by cwah on May 19, 2019 13:50:21 GMT
Yeah I may put a stop loss... But I believe it shouldn't go under anytime soon. It's not like they are already out of cash now.
They wanted this additional fund for winter initially. And summer is the period where they make most of their profit.
The lowest point of their share was £0.08 so it can still go 40% lower or more to reach its lowest value!
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archie
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Post by archie on May 19, 2019 14:13:37 GMT
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cwah
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Post by cwah on May 19, 2019 14:30:02 GMT
I've decided to buy some share hoping to make some quick buck on it.
There are more than enough statistics out there to support the opinion that only fools try to "make some quick buck" from the stockmarket.
You are setting yourself to be badly burnt one day. Not if, but when.
Next time you've got £5k burning a hole in your pocket, I suggest you give it to charity.
Why do you think it will go to £0? It has debt but the fundamental holiday market is here to stay and they have a good position as recognised brand. It is indeed hard time and yeah they are bleeding money but they are shifting toward hotel business (https://www.hotelmanagement.net/transactions/thomas-cook-hotel-investments-acquires-3-new-properties) So they already have plan to bounce back. The major issue, which is affecting ALL holiday business is the current economic situation with the big ones like Easyjet and Tui loosing money as well (http://www.travelweekly.co.uk/articles/331819/tui-suffers-deeper-winter-half-year-losses) So there is really an exceptional attack from news on Thomas cook due to its already weak balance sheet. The losses have a fundamental part (cheaper only competitors), but with a big chunck that is temporary (oil price up, brexit, lower number of bookings) The CFO said himself the £300M were normally not necessary but they're still looking into it if things turn even worse, but hopefully not.
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cb25
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Post by cb25 on May 19, 2019 14:42:25 GMT
There are more than enough statistics out there to support the opinion that only fools try to "make some quick buck" from the stockmarket.
You are setting yourself to be badly burnt one day. Not if, but when.
Next time you've got £5k burning a hole in your pocket, I suggest you give it to charity.
Why do you think it will go to £0? It has debt but the fundamental holiday market is here to stay and they have a good position as recognised brand. "Thomas Cook shares sink as Citi warns stock could hit zero" article here
I think there's a good chance they'll go bust because I was due to fly with Monarch a few days after they went bust and am due to fly with Thomas Cook in June. Perhaps the climate change God is trying to stop me flying?
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r00lish67
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Post by r00lish67 on May 19, 2019 14:52:02 GMT
There are more than enough statistics out there to support the opinion that only fools try to "make some quick buck" from the stockmarket. You are setting yourself to be badly burnt one day. Not if, but when. Next time you've got £5k burning a hole in your pocket, I suggest you give it to charity.
Why do you think it will go to £0? It has debt but the fundamental holiday market is here to stay and they have a good position as recognised brand. It is indeed hard time and yeah they are bleeding money but they are shifting toward hotel business (https://www.hotelmanagement.net/transactions/thomas-cook-hotel-investments-acquires-3-new-properties) So they already have plan to bounce back. The major issue, which is affecting ALL holiday business is the current economic situation with the big ones like Easyjet and Tui loosing money as well (http://www.travelweekly.co.uk/articles/331819/tui-suffers-deeper-winter-half-year-losses) So there is really an exceptional attack from news on Thomas cook due to its already weak balance sheet. The losses have a fundamental part (cheaper only competitors), but with a big chunck that is temporary (oil price up, brexit, lower number of bookings) The CFO said himself the £300M were normally not necessary but they're still looking into it if things turn even worse, but hopefully not. I have to say I'm quite perplexed by your variable investment risk appetite, although it is interesting! The other day I recall you asking us whether you should risk £100 on a P2P investment, and now you're betting £5k on an individual deeply troubled share that's gone down by 90% in the last year? No-one (without insider knowledge) knows what's going to happen, but this is pretty much straight gambling at this stage rather than investing. Perhaps a takeover will be announced and the shares will bounce up massively. Otherwise, it's more than possible it'll go to zero. Re: Thomas Cook, my immediate one word thought of the brand is 'dated' , in a similar way to British Home Stores. Their main rival, Thomson (now TUI), used to be interchangeable in the past, but in my view Thomson invested wisely in refreshing the brand and making a big play of having brand new dreamliners a few years back and some catchy TV adverts. Thomas cook, again IMV, seemed to do very little other than continue to fly dated aircraft back and forth. I'm not quite sure of your point about the holiday market being here to stay. That's no protection against individual firms going bust, ask the administrators at Monarch. Further, the trouble with the current situation for TC is the self-fulfilling prophecy - Despite ATOL protection, many consumers will now decide perhaps it's best to book with another firm just for the moment. If I had to bet my money (to be clear, I'm not going to), I'd bet it on TC failing. Their market has shrunk, they've under-invested, their brand has aged poorly, and beyond their landing slots being asset stripped, I can't see that there's anything else of that much appeal.
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r00lish67
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Post by r00lish67 on May 19, 2019 14:55:51 GMT
Why do you think it will go to £0? It has debt but the fundamental holiday market is here to stay and they have a good position as recognised brand. "Thomas Cook shares sink as Citi warns stock could hit zero" article here
I think there's a good chance they'll go bust because I was due to fly with Monarch a few days after they went bust and am due to fly with Thomas Cook in June. Perhaps the climate change God is trying to stop me flying?
On this - as I was looking at book a TC charter flight in December, I checked out the details of what's protected. Holidays are fine, but not apparently flights booked online, where you'd be forced to rely on credit card protection (which itself isn't available under certain limits). So I'm one example of a potential would-be customer who's no longer paying them money in the near future.
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