STOCK MARKET WATCHLIST: Asos founder spots a bargain in the sales
Asos founder Nick Robertson
A profit warning in December that caused shares to plunge had stock market punters wondering whether Asos shares were a bargain worth chucking in their shopping baskets.
Now, after a second profit alert in seven months from the online fashion retailer, they must be wondering whether the company might lose its unofficial title as the poster boy of AIM, London’s junior stock market.
The company blamed IT problems at its warehouses abroad for its latest woes, which have halted the share price recovery of earlier this year in its tracks. Loyal shareholders who stuck with the company when its value hit £6.4 billion just over a year ago – perhaps in the hope that the firm might be snapped up by a much larger retailer – must be ruing their luck.
They surely wish they had the foresight of the company’s founder Nick Robertson, who stepped down as chief executive in 2015, but remains a non-executive director. In April, he had the good sense to sell £15.3 million of Asos shares at £37.23 each. Today, they stand at just £21.81. Now that’s a discount.
It’s been a soap-style drama at ITV for Dame Carolyn McCall, who has seen its shares dive from £1.70 in January 2018, when she joined, to £1.10. The former easyJet boss has been working to turn around ITV’s fortunes with BritBox, a venture launched with the BBC to challenge Netflix, whose growth has hurt ITV shares, along with concern over a slump in ads. First-half results on Wednesday should reassure investors, says Ian Whittaker at Liberum. The analyst reckons ITV1, which rakes in most advertising, is holding up better than the shares suggest.
He may be backing the ebullient Boris Johnson to be Prime Minister, but Crispin Odey is clearly not quite as confident about the housing market in the British Isles. Short-selling data firm Breakout Point has spotted that Odey has just made a bet against Cairn Homes, the Irish housebuilder with a listing in London. The company is worth £787 million, which means Odey’s short position of 0.64 per cent is worth £5 million. He profits if the shares tumble, but will lose out if they rise. As in the UK, the Irish property market is on shaky ground, with house prices on the slide. Odey’s bet could be a worrying sign of worse to come.
Another week, another potential fundraising on London’s junior stock market. A little birdie tells me that AIM-listed tiddler Alexander Mining is planning a share placing to raise up to £1 million. City sources say the mining and mineral processing firm’s stock could be placed at a substantial discount to its current share price of 0.4p. It is thought Alexander Mining will secure £750,000 to £1 million from investors. As one of the smallest companies listed on AIM, with a market value of just £831,000, a £1 million cash injection would be a major boost for the firm.