Early premarket gappers
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A supermodel guide to great hotels
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Notes from the CEO on another failed THG takeover approach
“No shit! Ingenuity is great”
If you stopped at THG’s announcement that it had terminated talks to sell itself to Apollo, you're missing half the fun.
Matt Moulding, the increasingly embittered founder and CEO of the mascara-to-ping-meals conglomerate, has committed a very long LinkedIn post that explains the reasons why staying listed in London, in spite of its myriad failings, is still preferable to going private. Here are just a few highlights:
Just about every major PE firm has enquired about taking THG private. Usually, nobody finds out. But if there’s a leak, then the Takeover Panel forces an announcement. This is what happened with Apollo.
PE interest isn’t surprising. For the 3 years before IPO, THG shares traded at £3. Having doubled in size we then listed THG at £5 a share in Sep 20. They rose to £8 in the first-year post IPO but, after the Numis led short attacks when they weren’t made a Broker to THG, shares fell to as low as 30p in late 2022.
We're checking with Numis whether it agrees with the characterisation here of “Numis led short attacks when they weren't made a broker to THG”.
The last time THG shares traded at 30p was in 2009, when the Group had £80m Sales and only sold CDs! Today THG is 28 x bigger (and we haven’t sold CDs for years).
THG was a private company in 2009 so presumably he means the post-money valuation on a fundraising. A reminder that THG cancelled flotation plans two years later after discovering that its valuation had been inflated by fraud.
Like with all previous bidders, the Apollo bid wasn’t right for THG. Yes, it allowed existing shareholders to stay invested, with me continuing to run the Group. But Apollo also wanted PE controls, particularly across Beauty & Nutrition where they asked for controlling equity rights.
Like all previous bidders, Apollo were told their bid valuation and structure was unacceptable. Yesterday Apollo set out how they could raise their bid further, ahead of a deadline set by the Takeover Panel. Their latest view on Ingenuity had it as being significantly more valuable than the whole of THG the day before the bid leaked!
No shit! Ingenuity is great. But neither Apollo’s bid price, nor the structure proposed, are in the best interest of THG. Myself, Charles and the Board, supported by>50% of shareholders, all agreed on that.
The LinkedIn post comes with a photo of an injured Moulding that raises the possibility he has literally shot himself in the foot. Metaphorically, time will tell.
>>> Up
* Acerinox Raised to Overweight at Morgan Stanley; PT 12.80 euros
* American States Water Raised to Equal-Weight at Wells Fargo
* American States Water Raised to Equal-Weight at Wells Fargo
* Barclays Raised to Outperform at RBC; PT 230 pence
* Crest Nicholson Raised to Buy at Berenberg; PT 310 pence
* Euronav Raised to Buy at Deutsche Bank; PT $20
* Fortum Raised to Buy at Inderes; PT 16 euros (+)
* Golden Ocean Raised to Hold at Pareto Securities (+)
* Molson Coors PT Raised to $74 from $68 at Jefferies
* Outokumpu Raised to Overweight at Morgan Stanley; PT 7.80 euros
* Outokumpu Raised to Overweight at Morgan Stanley; PT 7.80 euros
* Pearson Raised to Overweight at Morgan Stanley; PT 920 pence
* Redrow Raised to Buy at Berenberg; PT 643 pence
* SpareBank 1 Nord Norge Raised to Buy at ABG; PT 106 kroner
* TGS Raised to Buy at Pareto Securities; PT 200 kroner (+)
* WDP Raised to Sector Perform at RBC; PT 27 euros
>>> Down
* Aperam Cut to Equal-Weight at Morgan Stanley; PT 42 euros
* Coloplast Cut to Hold at ABG; PT 900 kroner
* Coloplast Cut to Underweight at JPMorgan; PT 775 kroner (+)
* Derwent London Cut to Neutral at Goldman; PT 2,380 pence
* Diageo ADRs Cut to Hold at Jefferies; PT $190
* Diageo Cut to Hold at Jefferies; PT 3,800 pence
* DIC Asset Cut to Hold at Bankhaus Metzler; PT 7.60 euros (+)
* Great Portland Cut to Neutral at Goldman; PT 520 pence
* Salmar Cut to Hold at Nordea
* SOITEC Cut to Underweight at JPMorgan; PT 100 euros
>>> Initiation
>>> Initiation
* Dowlais Rated New Buy at Stifel; PT 175 pence (+)
* Geberit Rated New Sell at Citi; PT 420 Swiss francs
* Geberit Rated New Sell at Citi; PT 420 Swiss francs
* MSCI Rated New Hold at Baptista Research; PT $510
* Puma Rated New Buy at Bankhaus Metzler; PT 68 euros (+)
>>> Call
>>> Call
* Barclays Upgraded at RBC on Unsung Structural Hedge Benefits
* Berenberg More Positive on UK Homebuilders; Redrow, Crest Raised
* Citi Sees A Race to Raise Cash as Debt Ceiling Nears: ECM Watch
* DB Strategists See Bigger Drop in Europe Earnings in Second Half (+)
* Diageo Cut to Hold at Jefferies as US Growth Rate Normalizes
* Geberit Initiated With Sell Rating by Citi on Multiple Headwinds
* Metro Sales Better Than Expected, Earnings a Beat, Baader Says
* Outokumpu, Acerinox Raised at Morgan Stanley, Aperam Downgraded
* Pearson Raised at Morgan Stanley on Overlooked AI Opportunities
- Rolls-Royce (RRU TH) +2.7%
- Rolls-Royce Recovery Driven by Long-Haul Travel: Company Outlook
- BAT (BMT TH) +1.4%
- Reynolds Files Lawsuit in California to Protect Its Lawful Non-Menthol Products
- Pearson (PES TH) +1.2%
- Pearson Raised at Morgan Stanley on Overlooked AI Opportunities
- Rio Tinto (RIO1 TH) +1%
- Watch European Copper Stocks Ahead of LME Asia Week in Hong Kong
- Erste (EBO TH) +0.9%
- Puma (PUM TH) +0.9%
- Puma Rated New Buy at Bankhaus Metzler; PT 68 euros
- Aurubis (NDA TH) +0.8%
- Watch European Copper Stocks Ahead of LME Asia Week in Hong Kong
- Wacker Chemie (WCH TH) +0.8%
- Orsted (D2G TH) -0.6%
- Danone (BSN TH) -0.7%
- SocGen (SGE TH) -1.1%
- SocGen Debt Traders Beat Peers as First-Quarter Profit Gains (1)
- Coloplast (CBHD TH) -1.4%
- Coloplast Cut to Underweight at JPMorgan; PT 775 kroner
- Coloplast Cut to Hold at ABG; PT 900 kroner
- Salmar (JEP TH) -1.5%
- Salmar Cut to Hold at Nordea
DAX:
- Deutsche Bank (DBK TH) +0.7%
- Vonovia (VNA TH) +0.6%
- Allianz (ALV TH) +0.5%
- Pimco Clients Add €14 Billion, Ending a Year of Outflows (1)
MDAX:
- Aurubis (NDA TH) +1.3%
- Watch European Copper Stocks Ahead of LME Asia Week in Hong Kong
- Thyssenkrupp (TKA TH) +0.8%
- Bechtle (BC8 TH) +0.6%
- Hensoldt (HAG TH) -0.5%
- Nordex (NDX1 TH) -0.6%
- Nordex 1Q Ebitda Loss EU114.9M, Est. Loss EU58.8M (2 Est.)
SDAX:
- Metro (B4B TH) +1.5%
- Metro Sales Better Than Expected, Earnings a Beat, Baader Says
- Eckert & Ziegler (EUZ TH) +1.4%
- Eckert & Ziegler with Strong Sales Growth in the First Quarter of 2023 (english)
- Deutz (DEZ TH) +0.6%
- Deutsche PBB (PBB TH) +0.6%
- Suedzucker (SZU TH) +0.6%
- Software AG (SOW TH) -0.7%
- Schroders Says Silver Lake’s Bid Undervalues Software AG: FT
- Vitesco (VTSC TH) -5%
- Vitesco 1Q Adjusted Ebit Misses Estimates, FY Outlook Confirmed
Foldable iPhone and iPad: Here’s what the latest rumors say
Apple competitors like Samsung have been trying to push foldable smartphones and tablets for some time. And while this is a niche market, Apple is rumored to have been experimenting with this idea internally. We don’t yet know when, or if, the company will introduce a foldable iPhone or iPad – but read on as we detail what we know so far.
Latest rumors on Apple’s foldable iPhone and iPad
Rumors suggest that the Cupertino-based company is internally developing prototypes of foldable iPhones and iPads, but those devices are far from seeing the light of day. Analysts Ming-Chi Kuo and Ross Young reported that Apple’s first foldable product is expected to be introduced in 2025 “at the earliest.” Details about these devices remain unclear at this point.
This comes as no surprise since Apple has been following a more conservative approach in recent years. Due to the large number of devices the company ships each year, Apple would likely face several supply issues with the launch of a foldable phone at this point, since this technology is still limited and more expensive.
But what would an Apple foldable device look like? People familiar with the matter have been saying that the company has different prototypes inside its campus. One of them looks more like an iPhone that folds – an idea similar to Samsung’s Galaxy Z Flip. Another prototype looks more like an iPad that folds into a phone. Kuo said this year that he believes the foldable tablet will come first.
I’m positive about the foldable iPad in 2024 and expect this new model will boost shipments and improve the product mix. My latest survey indicates that the foldable iPad will feature a carbon fiber kickstand. Carbon fiber material will make the kickstand lighter and more durable.
Last year, Young claimed that Apple was in talks with its suppliers to order 20-inch displays for a foldable laptop. Of course, these are all for experimental prototypes and none of these are product designs that are about to see the light of day. Still, it’s interesting to see that although having a foldable device is not a priority for Apple, the company is not ruling out the idea for the future.
CCS Insight also predicted that Apple’s first foldable device will cost around $2,500, much more expensive than current iPhones. But at the same time, foldable devices from other companies are not cheap either. Samsung’s Galaxy Z Fold 4 starts at $1,799. Google’s new Pixel Fold also comes with a price tag of $1,799.
Are foldable phones worth it?
Some people think foldable devices are nothing more than a gimmick, while others really see the potential in this technology. I had the opportunity to test Samsung’s Galaxy Z Flip, and while I wouldn’t use it as my main phone, it made me realize that there’s some room for these kinds of phones.
Samsung has been doing a great job with its foldable phones, and these devices open up a lot of new possibilities. For some people, it’s all about making large phones fit into a pocket or purse. For others, it’s about new ways to interact with the phone when it’s folded. I had fun taking selfies with my Z Flip without having to hold it or put it on a stand.
At the same time, these devices still look more like prototypes than devices for end users. There’s still the crease where the display bends and they’re still quite fragile. These are things that Apple can change with its own foldable device.
Are you looking forward to seeing a foldable device from Apple? Let us know your thoughts in the comments section below.
Adidas Will Sell Its Yeezy Inventory
At its annual meeting Thursday, the company confirmed plans to sell its remaining stock of Yeezy sneakers rather than destroy the merchandise. Adidas also told investors that an investigation into Ye’s workplace misconduct did not substantiate claims of harassment.
KEY INSIGHTS
- CEO Bjørn Gulden confirmed the brand will sell its remaining Yeezy inventory, with a portion of the sales going to charities.
- The company announced an internal investigation failed to substantiate claims that Ye, formerly known as Kanye West, harrassed Adidas employees.
- Key shareholders ultimately expressed their confidence in Gülden’s turnaround plan, which aims to reassert the brand’s credibility in performance sports products, and return to growth in China and North America.
Adidas will sell its remaining inventory of Yeezy sneakers rather than destroy them, CEO Bjørn Gulden told shareholders at the company’s annual meeting Thursday, ending months of speculation about the pile of unsold stock, estimated to have a market value of €1.2 billion ($1.3 billion).
When and how the sneakers will be sold are still to be determined, but “burning the shoes is not an option,” Gulden said in the contentious meeting, in which numerous shareholders voiced their frustrations with the brand’s handling of its ill-fated partnership with Ye, the rapper formerly known as Kanye West. A portion of the proceeds will go to charity.
In October, Adidas was forced to cut ties with Ye amid mounting public and internal pressure after the rapper made a series of anti-semitic comments. The following month, the company received an anonymous letter from former employees that accused Ye of harassment and inappropriate behaviour while working at the brand. In April, a group of investors filed a class action lawsuit against the German sportswear giant, alleging the company knew about the risks of its partnership with Ye years before his inflammatory comments were made public. The suit named former CEO Kasper Rørsted and current chief financial officer Harm Ohlmeyer among the defendants.
In the meeting Thursday, Gulden and his executive team announced that an independent investigation into Ye’s alleged workplace misconduct failed to substantiate claims that he harassed female employees and showed pornographic material to members of staff — an outcome that evoked hushed gasps from investors on the livestreamed event.
“The allegations are not accurate, the [legal] proceeds are still in the early stages and we will defend ourselves against these accusations,” said Gulden, who declined to comment further on the matter.
At the meeting, some shareholders also criticised Adidas for its alleged failure to protect garment workers and pay fair wages at certain factories — claims that Gulden later refuted. Last week, a group of US lawmakers wrote to Adidas, among other retailers, to request information on whether the company is importing products derived from forced labour in China.
The Yeezy Debacle Rolls On
The decision to sell the Yeezy sneakers, rather than destroying the merchandise, marks Adidas’ clearest update yet on the dilemma, which had been weighing on the company since October, when Adidas terminated its partnership with Ye. The company’s stock hit a nearly eight-year low shortly after, though shares have since recovered and are up 30 percent this year. Shares ended up 2.1 percent on Thursday.
“The shoes will sell out,” said sporting goods analyst Matt Powell. “Speculators will lap this product up, assuming they can flip it for a profit since these will be the last Yeezy products on the market.”
But even with an apparent resolution regarding the Yeezy brand, Adidas did not quell all of its investors’ concerns, especially those surrounding Ye’s alleged misconduct at the company.
Union Investment — one of Adidas’ largest shareholders — pressed the brand’s executives on how long it was aware of Ye’s problematic behaviour and why it took no action prior to last October.
Adidas declined to go into detail about the shareholder lawsuit, but provided an update on its own separate internal investigation into Ye’s workplace behaviour, which it launched in November after receiving an anonymous letter from former employees outlining grievances relating to his alleged misconduct.
CFO Ohlmeyer said that “[Ye’s] erratic behaviour and his misconduct during the partnership meant we had quite a challenging working environment,” but added that the most severe claims — which included harassment of female staff and a claim that the rapper showed pornographic material to Adidas employees — were not substantiated by the internal inquest conducted by a US law firm.
The company maintained that it was unaware of reports of Ye’s problematic workplace behaviour prior to the anonymous letter in November, denying the claim in the lawsuit that Adidas had known but ignored his conduct.
The Bright Spots
Key shareholders ultimately expressed their confidence in Bjørn Gulden’s turnaround plan, which aims to reassert the brand’s credibility in performance sports products, and return to growth in China and North America. As part of the plan, Adidas will also refine its partnerships strategy to focus on fewer, more impactful collaborations.
“You have a lot of work ahead of you to help Adidas unleash its potential again,” said Janne Werning, head of ESG Capital Markets at Union Investment, one of Adidas’ biggest shareholders. “We are confident that you can turn the tide.”
For Adidas, there is light at the end of the tunnel. Analysts say the soaring demand for its Samba and Gazelle sneakers along with the upcoming Fear of God Athletics launch will offset some of the losses caused by the termination of the Yeezy business. Meanwhile, a turnaround in China, once the brand’s most profitable market, is slowly underway.
“We have not been delivering for many reasons,” Gulden said. “But we have all the ingredients for future success.”