Speak of the devil


(Joan) #1

From the news: “Shares in the owner of Ladbrokes owner collapsed on Friday after the chairman and chief executive sold shares worth almost £20m.
GVC Holdings, part of the FTSE 100, fell as much as 18pc after boss Kenny Alexander and chairman Lee Feldman pocketed £13.7m and £6m respectively from selling almost three million shares in total.
They sold the stock at 666p a share”

Somebody can explain me what the hell is going? Why are they selling after saying all is ok?


(Matthew) #2

It’s fine and the market is just overreacting to the variety of news. The management team aren’t going anywhere anytime soon as the really big pay out for them won’t be for another few years. Personally, I’m filling my boots during this buying opportunity as this is a great chance to lower my average cost per share.

People overreacted to the positive news during the end of year investor presentation, and this drove the shares up to around £7.22, but then fell away to around £6.90 by the end of the day.

The market then overacted negatively to the news of Kenny & Lee selling some of their shares. This amplified the pace of the already falling shares down from £6.90 to around £5.50. The shares ended the day back up at around £5.90 and looking like they were trying to edge higher.

There will be a bit more volatility during next week due to the shares going ex dividend and also falling out of the FTSE100, but it’ll settle down again in a few weeks time. Based on the 32p dividend then I’m pretty sure that these will be back trading at around £6.40-£6.60 a share within the next couple of weeks. However, there might be a bit of value around during the next 2 weeks or so.

Do you own research, etc. but as I said. I spent Friday filling my boots, and I if the prices stay reasonable then I plan to pick up some more during Monday or at some point during next week. I bought in originally at around £6.44, sold out at £6.80, and then bought in again with a few trades between £6.35 - £5.69 - £6.01. Once this all settles down I’ll get back to playing the long game on this and just picking up more shares each month for the next few years. My plan is to sell these when the M&A debt is paid off as this will free up the profits, etc. and significantly increase the share price.

Kenny keeps mentioning getting the shares up to around £20 and once the M&A debt is paid, all that he needs to do is double the dividend &/or do another M&A deal and the shares will jump to this level. This will be the point at which the management team will get their big payout, and they know it.

Know the game, know the players, play the long game, but enjoy the short game when the opportunities arise. :slight_smile:

Matt


#3

Cracking analysis :+1::+1::+1: