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Real-Time news about Hmv Grp (London Stock Exchange): 0 recent articles
|loganair: John148 - The problem with the MAMA purchase is that HMV paid for it out of debt (£46mln) instead of via a rights issue when the HMV share price was still over the 100p mark.
If the purchase had be paid for via a Rights Issue in my opinion I think that HMV credit insurance wouldn't have been pulled, costing HMV an extra £40mln to £50mln therefore HMVs current debt would be some where between £80mln and £100mln less then it is today.
Taking off the £30mln odd for the Sale of HMV Apollo would have left them with less than £45mln in debt.
Both Rolls Royce and especially Cadbury regularly used Rights Issues in any take-overs.
A Rights Issue often a good investment when the company is buying another and often very well supported, on the otherhand a Rights Issue when the share price has collapsed due to taking on too much debt because of take-overs often not so well supported and shows very poor management.|
|festario: I believe that the HMV share price has found its new natural level following the news from the banks. That level being around 6p.
The same thing happened with Thomas Cook. A massive fall, a good recovery after the banks gave them breathing space...then a fall back to a natural level.
Thomas Cook has not budged from that in over a month... HMV will do likewise.
Only positive trading updates can really hike the price on any company, and there has been no such news from HMV.|
Momentum traders are not interested in the realities surrounding a company. They are only interested in the direction of the share price movement. After a 200% move in a single day you would expect the momentum traders to express a fervent and generally ill-informed belief that the share price would continue to rocket regardless of fundamentals.
The management of HMV believe they will be able to half their net indebtedness over the course of the next 3 years (And we all know how credible the HMV management have been over the course of the last few years). So the greediness of the stockmarket could seek to price in all of that possibility in one giant leap. Doing so without taking account of losses for the current year or the trading results for the next 3 years and without taking account of the net proceeds of disposal of HMV Live would suggest a Net Asset Value of around 10p per share. If the stockmarket is very greedy it may also seek to price in the benefit of the net disposal proceeds of HMV Live which could add another 7p per share whilst assuming that the reduction in bank interest costs would allow HMV to move toward break even sooner rather than later.
So that would suggest the share price could rise to as much as 17p a share and take it back to levels last seen in March 2011. Would the stockmarket be so insane as to price in the next 3 years all in one go and leave the share price with no further upside ? Well such moves occur all the time across the stockmarket. If it did so short sellers would stand back and wait for such a rally to lose buying interest and thank the momentum traders for the unexpected opportunity to reset their short positions at much higher levels to benefit from an inevitable and probably protracted share price correction.|
|loganair: Where Fox made his biggest mistake was to buy Mama out of debt instead of going for a Rights Issue when HMV share price was around 70p. IMO if Fox had done this HMV would not have lost their credit insurance. Fox could now sell HMV Live leaving HMV stores with little debt making a very small yearly profit.
Instead, by buying Mama with debt has added some £50mln of debt with loss of credit insurance, leaving the whole group with around £150mln of debt.|
|nolens volens: Nomura 10 target for hmv share price http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=11798386|
|bobsidian: techmark - 5 Aug'11 - 08:49 - 14408 of 14414
The problem is that HMV belongs to the banks and to the suppliers and survives courtesy of their favour.
At the current share price the stockmarket has effectively closed to HMV the capital raising route as a source of financing.
It does not stop the volatility in the HMV share price being lucrative if you are brave enough to buy and are adept at timing. Not a bad return of around 15%+ on the back of little more than £100,000 worth of shares traded. But given just how difficult it would have been to judge the lows and highs, any of that return would not have been easily achievable. For many there will be safer bets elsewhere in shares that are not crafting new all time lows.|
|libertine: Don't fall into HMV 'value trap', investors warned
Is HMV (HMV.L) an underdog or just a dog?
Broker Seymour Pierce believes the struggling retailer is a 'value trap'; that despite the 73% tumble in its share price in the year-to-date, it is still expensive relative to its intrinsic value.
In a research note published today, the broker downgraded its earnings forecasts for HMV in 2012, following last week's results in which the music and DVD retailer posted a 61% drop in annual profit and the disposal of its Waterstone's books chain and its Canadian arm.
'The restructuring so far has failed to create shareholder value and does not address the structural pressures the core business is under,' the broker wrote.
Reiterating a 'sell' recommendation, it added: 'We continue to believe that the intrinsic value, if any, of HMV UK is in decline and we are sceptical that management's strategy of turning HMV into an entertainment brand will work.'
In morning trading, HMV shares eased 0.04p, or 0.5%, to 8.82p valuing the company at £37 million.
HMV Group Jun 2009Dec 2009Jun 2010Dec 2010Jun 2011Dec 2011050100150Share priceSource: Hindsight
The 90-year-old group last week reported a profit before tax and one-off items of £28.9 million in the 53 weeks to April 30, in the wake of four profit warnings this year.
The firm branded its performance 'disappointing and unsatisfactory'. Yet, citing 'decisive action' to restructure the group, HMV said it had a clear strategy to become a broad-based entertainment business.
On the back of the disposals, HMV secured a two-year credit facility of £220 million with its banks to refinance its debts. Seymour Pierce said that in light of the move, the broker now expects HMV to post pre-tax profit of £2 million in 2012, and for profits to continue to fall in 2013.
'We remain sceptical given the structural pressures in its core market place of physical music and gaming and do not believe that the move more aggressively into portable digital technology will be strong enough to drive footfall and earnings,' the broker said.
It went on to say: 'We continue to believe that the business is a value trap and management will struggle to grow profitability.'
As other investors have fled the stock, Andrew Brough's Schroder Mid 250 fund has held onto its 25 million shares, according to data to mid-May, representing a 5.9% stake in HMV. The stock is not, however, one of the fund's top holdings.
And Robin Hepworth who runs the Ecclesiastical Amity International fund, a Citywire Selection pick has maintained a small holding in HMV. He told Citywire last month that its share price fall was an overreaction and offered 'some value'.
Meanwhile, data from Starmine Professional show that most brokers take a dim view of the stock. There are currently three 'hold' recommendations for HMV; one 'sell'; and four 'strong sell', with an average target price of 8.43p
|totally banjo: For a start this chart displays the effect the global crisis along with the ever changing way music/entertainment as a whole is purchased also with the decline in the UK High-street generally has effected HMV,so and therefore we are now seeing whether HMV can re-invent themselves to remain competitive.
In some respects HMV don't have to change that much from the position they are in today after the sale of Waterstone's and HMV Canada are completed but that's just my opinion of course.
Blue line=FTSE 100 Share price
Black line=HMV Share price
free stock charts from www.advfn.com
EDIT- I'd better add that the chart has not been posted to imply previous SP's can be achieved as I would suggest a range from 10p-20p is more likely for the time being at least.|
|loganair: The simple fact is that the financial institutions are able to hold a share price at what ever price they like irrespective of going short or long, it's as simple as that.
It's the people like Goldman Sachs who set the share price, short or long doesn't matter.
If Goldmans what the HMV share price at 8p, it will be 8p, if they want it at 20p it will be 20p.|
|loganair: techmark - giving up Records or cassettes in favour of DVD's and CD's is still keeping the physical, there are many millions like myself who will not give up the physical for the non-physical. My son who is 6 and is therefore the next generation when offered the choice always plumps for the physical DVD, CD or book, as they are something that is his, his to look after and care for. Any time he wishes he looks out from his bed to see shelves full of his favourite books.
And I'm afraid techmark, Google Cloud Base will not be able to offer what my son loves the most.
The reason why HMV share price has declined by 90% because they were far to slow off the mark and are now behind the curve. Less then 10% UK and Ireland turn over is Live Entertainment when this figure by now should have been at least 1/3rd. I think if this had been the case HMV share price would not have fallen below the 100p level.
As investors most of us know that a share price often goes to far in one direction. You mention Apple, how much of it's share price is invested in Steve Jobs. Look what happened when he went on sick leave, an immediate 7% drop in share price. I could say, look at Micro Soft in 2000 and look at it's share price now.
techmark - you mention millions and millions of people. There are 65m people in the UK. If 55m change, that still leaves 10m, sufficent for the last man standing.
HMV some how will have to sell on-line to match the price Amazon sells at, it's as simple as that.|
HMV share price data is direct from the London Stock Exchange