Thg Share Discussion Threads

[merrick1965] 11/1/2022 12:44

The problem with the logic I have with Moulding buying the property is it is conflicted decision making

He buys the property to reduce company debt and improve balance sheet he then raises money and buys Cult beauty,

I think a bad purchase and overpaid (£5 million profit £275 million purchase overlap in product range and channels). So return on capital employed is low even if you use THG figure of contribute £10 million a year profit. Whereas the rents are 6-8% a year obligation. Moulding retains asset and asset growth over 25 year lease

Bentley and Acheson & Acheson good synergy and margin fits and thg have distribution channels for higher margin products)

The issue here is amortising investment over a lifecycle - THG could have bought the properties with an employees pension fund and paid rent. It could have refinanced buildings and borrowed money the retained the assets on balance sheet

Whereas as now Moulding is personally guarantee income and retains assets.

What he has done is legal but was it put out to tender? No but independently appraised I guarantee you a reits or big pension fund would have bought this portfolio. The question is not legality but how does it sit in perception with fellow shareholders - a bit like I’m ok Jack my shareholding increased by 50% but other shareholders got diluted so I could get my bonus - and shares down 70%. It’s not my fault it’s the shorters - arent they naughty boys - but my property deal and share options are legitimate because I paid somebody to tell me so

What I will say is Moulding is talented and once dust settles then the company should do ok for they have traction and penetrated new markets

[propinv] 11/1/2022 12:38

Of course you don't, nor do I. But it isn't changing.

[hybrasil] 11/1/2022 12:36

prop

I am a buyer at this price - I just don't like the property situation

[bldm] 11/1/2022 12:09

What's the problem with a company owning property? I mean, "property and equipment" is a category in balance sheets. I don't see a problem with them renting the property either. There are 2 major problems there though. First, the CEO is the landlord which immediately creates a conflict of interest. For example, how does THG renegotiate a lower rent exactly when it's in the CEOs interest not to? I believe the article says the profits from rent all go to charity so perhaps that is to address the conflict of interest but then you have to look at the second property company moulding owns to see what the profits are - he could be minimising profits in many ways. Second, the prices at which the properties were acquired by Moulding are questionable and hence so are the rents currently paid by THG. It's just really dodgy. What does moulding do? Instead of addressing this, he comes out blaming shorts. If someone can point out inconsistencies within your company, the fact that they are short doesn't make these inconsistencies any less relevant. It's obvious that anyone seriously digging into your company, will short it when they find a lot of dodgy dealings. In fact, if there really are a lot of shorts like Moulding says (which I don't believe) it's just strengths the argument that THG is a bad nut. Shorters (on fundamentals) often aren't wrong, even the ones that lose money lose it more due to timing rather than being wrong on the company.

[hybrasil] 11/1/2022 12:00

I had a look at the prospectus. The rent seems to £19,767,000.

I hadn't read it (unwisely) before I bought the shares.

It probably makes sense (provided the rents and lease terms are appropriate for wherever the properties are situate)that the company acts as a trading company and not as a property owning company.

What if there is inflation and property values massively increase. Is it fair this all belongs to MM?

[bldm] 11/1/2022 12:00

Merrick1965 - thanks for the article, it looks good. It's what my impression of SB is but built from multiple sources. It's good to have it confirmed.

[bldm] 11/1/2022 11:49

Propinv sure, if they can cut a deal. But what would this deal be? What would it do to the share price? At the moment, 95% of the posters here tout the SB option as the "true value" of THG and make their decisions that THG is undervalued based on this. If the new strike price is £3 what would this do to the price 😂. What if the new strike price is £2? It's just another risk. Like I said many times, SB have a few good bets that pay for all the bad bets they've made and are making.

[sentimentrule] 11/1/2022 11:46

Here puss puss 🐈‍035;, got a nice saucer of milk for you

[srs8] 11/1/2022 11:43

hahahaha. you tell him

[sentimentrule] 11/1/2022 11:42

Sell them you little puss..if your so afraid of everything. Puss

[bldm] 11/1/2022 11:39

I'm very sure the tiny shorts are much less the root cause of the fall in share price than MM actions and miss-actions. His dodgy deals, the ridiculous interviews, blaming shorts while not addressing questions, opaqueness, uncertainty about the structure of THG. Emperor has no clothes type of a situation. At the moment, the business is appropriately priced. Nobody wants to buy into a company that has so much risk associated with it. Just can't tell if the FCA shenanigans are him trying to hide/divert/confuse or him just psychologically not handling the share performance well.

[srs8] 11/1/2022 11:37

BLDM - wolf in sheeps clothing. I really dont understand you, but I really do not admire it

[propinv] 11/1/2022 11:34

If you are SB, you don't want the option to lapse otherwise you have just bought 730m USD of THG at over 2.5x current MV. Much better to save face, and cut a deal on the option, so extend for down payment etc

[bldm] 11/1/2022 11:26

hxxps://markets.businessinsider.com/news/stocks/softbank-unwind-nasdaq-whale-options-trades-billions-losses-investor-backlash-2020-12

[propinv] 11/1/2022 11:26

Personally I think more likely scenario is restrike the option with flexible terms, so part payment down and the mechanism flexes depending upon some other external, ie discount to float price of Ingenuity etc. hard sell for a vision fund to be buying up the other divisions

[srs8] 11/1/2022 11:25

agreed merrick - private purchase would not surprise me.

Moulding + Sofina (who have a board member)+ balderton+ softbank have very close to 50% to takeover

Its an interesting option, that would end the shorts control in an instance

[srs8] 11/1/2022 11:18

there is nothing credible about how the market values this company at the moment; but if a successful agreement comes into play with softbank, the share price will move up quickly, and to date the only official comms from THG is that the seperation is on track for H1 '22, and from softbank via Andreas (who is also a new THG board member) that softbank is happy with the partnership. Companies dont value opps on todays share price, but on a 2-5 year potential

[propinv] 11/1/2022 11:14

Surely everyone's working assumption at the moment is that SB won't exercise the option. In fact, who things anyone credible exercises an option on part of a business at over 2x value of the whole business. No one. If people still think the option would be exercised then they will be valuing all the other divisions, exc Ingenuity, at about £1bn in total. So about 0.5X sales value.

[senseibull] 11/1/2022 11:06

Huh its not seen a new low in over a month

[chesty1] 11/1/2022 11:04

This hasn't been able to hold onto any gain since October! Can you all not see something stinks here & it's not just the sp!

[merrick1965] 11/1/2022 11:03

SoftBank is an interesting conundrum at present they are trying to borrow 4 billion secured against the vision fund ( who have loan and option with THG) sorry it may be vision fund 2 - but the fact remains SoftBank are not cash nor asset rich

The fund relied heavily on leverage, with $40 billion of its capital coming in the form of preferred stock carrying a 7% interest rate that is held by Abu Dhabi sovereign-wealth fund Mubadala Investment Co. and Saudi Arabia’s Public Investment Fund. The preferred stock has had the effect of magnifying wins and exacerbating losses.



When SoftBank borrow money there will be primary covenants and to invoke the THG option the primary lender may want to see a better ROCE to improve short term cash flow to ensure SoftBank ability to service loans and SoftBank have some hefty loans at 7%. Looks like SoftBank over leveraged (like evergrande - sounds harsh but SoftBank primary investment is Albibaba so fund has massive losses hence the need to borrow more money to finance higher loans (a dangerous model when interest rates are rising and tech investments with high PE less attractive)

The point I am making is can SoftBank vision fund even afford the THG option and will their lender give them cart Blanche to invoke THG option. As said I think big boys know something we don’t - but the article I linked to gives more insight than I

[bldm] 11/1/2022 10:56

It is indeed worrying. Not small numbers either. We're talking hundreds of millions. At the very least, his side deals mean he is not all-in on THG - if THG was to be valued at 0 tomorrow, he still has the property. My worry is - when you find one roach, there usually are more. If he had listed in the US like he said he should have, he'd be in court right now. He also looks like the kind of greaseball that would defraud investors. Cash out so to speak.

[muffster] 11/1/2022 10:47

The Guardian article highlights how Moulding may have used company assets to enrich himself at the expense of the company. Worrying. I'm sure it will all come out and end up in Court

[bldm] 11/1/2022 08:59

Leon SoftBank offered wirecard, wework and greensill money to. Wework cost them 9 billion. They are known for overvaluing and overpaying. Even with arm, a great company, they bought it at a 40% premium although that wasn't overvaluation but the nature of the business. Just saying, you really have to take their valuation or what they pay with a grain of salt.