ATM - A2 Milk Corporation Limited

[flyinglizard]

12982

This is the monthly chart of BDI index, it is at 4304 point today. The trend shows the price no way turnaround in the near term.

The index reached 11800 peak in 2008. This time we are in a 15 years business cycle with a historical high coming inflation rate.

The fragile corporate daigou channel may have another major shakeup due to the rocket shipping cost. This challenges A2 management English label price stabilization strategy. It is not feasible without given any details.

When A2 no longer a growth company, it should be categorized as a commodity company and we should revisit valuation practice through the business cycle. The worst time is not coming towards A2 yet.

[see weed]

12982

This is the monthly chart of BDI index, it is at 4304 point today. The trend shows the price no way turnaround in the near term.

The index reached 11800 peak in 2008. This time we are in a 15 years business cycle with a historical high coming inflation rate.

The fragile corporate daigou channel may have another major shakeup due to the rocket shipping cost. This challenges A2 management English label price stabilization strategy. It is not feasible without given any details.

When A2 no longer a growth company, it should be categorized as a commodity company and we should revisit valuation practice through the business cycle. The worst time is not coming towards A2 yet.
A2 had a nice little run up yesterday after hitting the yearly low of $5.39 two days ago. Just another cat?

[see weed]

A2 had a nice little run up yesterday after hitting the yearly low of $5.39 two days ago. Just another cat?
Up another 18c today plus yesterdays 11c, what's going on?

[Baa_Baa]

Up another 18c today plus yesterdays 11c, what's going on?

Technically, daily chart shows an almost perfect double bottom and bounce.

[aperitif]

Now they are out of the major ASX indexes you’d imagine the board would be looking into a HK/Shanghai listing???

From November 2020
12993

[nztx]

Up another 18c today plus yesterdays 11c, what's going on?


Another Dead or Fundamentally unwell Cat bounce ? .. Options B C D & E to Me look like more comfortable plays ;)

[Maxtrade]

ASX open today at 1pm NZ time correct?
Not seeing any large volume trading yet on opening NZX currently

[Ggcc]

ASX open today at 1pm NZ time correct?
Not seeing any large volume trading yet on opening NZX currently

Well tomorrow might be an interesting rise.

[Akane]

https://www.nzherald.co.nz/business/synlaits-road-to-redemption-after-first-loss-in-9-years/HQJM3734PGWL2DEEOUMNOZHTAA/#

Synlait already have a plan in place....
Meanwhile at ATM HQ: "Everything is fine.........."

[Maxtrade]

Johnny the Horse.

Is that the double bottom you were looking for from a post of yours a long while back? Are your thoughts still that we see an onward and upwards trajectory from here?

https://www.sharetrader.co.nz/attachment.php?attachmentid=12666&d=1624672799

[whatsup]

$5-40 bottom for now, Im tempted !

Got that one correct up .90 , well done those who bought at the low !

[aperitif]

https://www.morningstar.com.au/Video/cause-for-optimism-at-a2-milk-and-invocare-reporting-season-roundup/215645

Nice to see some volume through the NZX today too. Enjoy

[bull....]

this cant be good

China’s population could halve within the next 45 years, new study warns
https://www.scmp.com/news/china/science/article/3150699/chinas-population-could-halve-within-next-45-years-new-study?module=lead_hero_story&pgtype=homepage

[alokdhir]

" The a2 Milk Company continued its recovery, rising 26c or 4.21 per cent to $6.43. Goodson said there is a school of thought that possibly a2 Milk is past the worst and there is still strong underlying demand for its product in China

There was initial speculation that a2 Milk would fall out of the MSCI Index, but now some people think it will stay in – and tens of millions of dollars worth of the stock has been sold short. It's quite an interesting counter-trend, and we will know later next month after the index's pricing period."

ATM is showing technical pressures on the upside ...big shorts are helping it stay in the range of $ 5.50 to $ 7 IMO

[couta1]

this cant be good

China’s population could halve within the next 45 years, new study warns


https://www.scmp.com/news/china/science/article/3150699/chinas-population-could-halve-within-next-45-years-new-study?module=lead_hero_story&pgtype=homepage Lol 45 yrs and could halve, I think the company has much bigger fish to fry in the interim and punters are only concerned about the next year or two.

[sb9]

Lol 45 yrs and could halve, I think the company has much bigger fish to fry in the interim and punters are only concerned about the next year or two.

He's trying hard to find a reason to short lol

[bull....]

A2 Milk at 'peak uncertainty' after Covid-19 hits key daigou trade


Tina Morrison05:00, Oct 01 2021

“The company is obviously so uncertain in their own business, that they’re not prepared to give guidance, so you can imagine what that makes a potential investor feel like,” says Dickie. “It is still a very cloudy outlook.”

https://www.stuff.co.nz/business/the-monitor/126279298/a2-milk-at-peak-uncertainty-after-covid19-hits-key-daigou-trade

[bull....]

Lol 45 yrs and could halve, I think the company has much bigger fish to fry in the interim and punters are only concerned about the next year or two.

could be quicker

Fear about the potential impact of Covid-19 following some news reports linking China’s Sinovac vaccine to miscarriages has caused people to delay having children, further shrinking the market for infant formula

https://www.stuff.co.nz/business/the-monitor/126279298/a2-milk-at-peak-uncertainty-after-covid19-hits-key-daigou-trade

[Maxtrade]

ATM rallying forward now. Or a hopefully little run ending in further falls hitting a new low below 5.40. P/E and current fundamentals would suggest SP should actually fall a long way still below $4. So why re we seeing this current rally? Market traders setting up to short again soon?

Chartist strategies at play or something else?

Thoughts guys and girls?

[Balance]

ATM rallying forward now. Or a hopefully little run ending in further falls hitting a new low below 5.40. P/E and current fundamentals would suggest SP should actually fall a long way still below $4. So why re we seeing this current rally? Market traders setting up to short again soon?

Chartist strategies at play or something else?

Thoughts guys and girls?
Citi believes there could be more bad news looming for A2 Milk. The broker is basing this on the fact that the company has yet to announce its performance rights for its CEO. It feels if things were going better, this would have now been announced.

Citi feels more bad news could weigh heavily on the A2 Milk share price. However, it also suspects that further share price weakness would make the company vulnerable to a takeover in or around the $7.00 per share mark. This is based on comparable acquisition multiples.

And judging by the company’s share price performance today, it appears as though some investors are focusing more on the potential takeover approach instead of the suspected continued underperformance of the company.

What’s next?

Time will tell how A2 Milk is actually performing. However, the good news is that investors won’t need to wait overly long to find out. The company is scheduled to hold its annual general meeting in approximately seven weeks.

All eyes will certainly be on A2 Milk shares that day.

[Maxtrade]

Citi believes there could be more bad news looming for A2 Milk. The broker is basing this on the fact that the company has yet to announce its performance rights for its CEO. It feels if things were going better, this would have now been announced.

Citi feels more bad news could weigh heavily on the A2 Milk share price. However, it also suspects that further share price weakness would make the company vulnerable to a takeover in or around the $7.00 per share mark. This is based on comparable acquisition multiples.

And judging by the company’s share price performance today, it appears as though some investors are focusing more on the potential takeover approach instead of the suspected continued underperformance of the company.

What’s next?

Time will tell how A2 Milk is actually performing. However, the good news is that investors won’t need to wait overly long to find out. The company is scheduled to hold its annual general meeting in approximately seven weeks.

All eyes will certainly be on A2 Milk shares that day.

Thanks Balance.
Not a lot of upside potential even if had a $7 takeover. Risk versus reward doesn't look attractive. Surprised anyone would be buying into it for such a small possible upside buyout return, especially with so many if's and risk much larger on the loss side.

[dreamcatcher]

Thanks Balance.
Not a lot of upside potential even if had a $7 takeover. Risk versus reward doesn't look attractive. Surprised anyone would be buying into it for such a small possible upside buyout return, especially with so many if's and risk much larger on the loss side.

Prefer to use darts then Citi's info much more accurate

[Baa_Baa]

While A2 Milk has pivoted to boost ecommerce and direct retail sales channels of Infant Formula into China, and we are yet to see the results of this, these by themselves will be unlikely to ever replace the retail daigou or wholesale daigou channels that were largely shut down by Australian covid border lockdowns.

This week two items of interest emerged that point to potential for the diagou channels out of Australia to re-open in the near future;

- Australian Therapeutic Goods Administration approval of Sinovac (https://www.smh.com.au/politics/federal/australian-regulator-approves-chinese-covid-jab-sinovac-for-travellers-20211001-p58wdj.html) (one of two China developed vaccines) for travellers into Australia.

"More than 80,000 Chinese international students are set to be allowed back into Australia when international borders reopen after the country’s top drug regulator recommended approving the Sinovac vaccine for travellers."

- Australia bringing forward border opening to November (https://www.smh.com.au/politics/federal/australia-set-to-reopen-international-borders-after-18-months-20211001-p58wcf.html), from previously December, based on targeted vaccination percentages of the population being reached and vaccination passports.

"The federal government will also work with all jurisdictions to increase and then remove the caps on international arrivals after it began issuing international COVID-19 vaccination certificates."

These developments may account for some of the renewed enthusiasm in A2M/ATM share prices over the past couple of weeks.

ATM share price put in an almost perfect double bottom at $5.39 on 21/9 and has since risen strongly to close up 22.3% at $6.60 Friday closing price.

[aperitif]

https://compounderfund.com/compounder-fund-the-a2-milk-company-investment-thesis/

[carrom74]

ATM share price put in an almost perfect double bottom at $5.39 on 21/9 and has since risen strongly to close up 22.3% at $6.60 Friday closing price.[/QUOTE]

One of the most picked stocks in Jan 2021(share trader picks)....It would be interesting what the company has to tell on Oct 27th...(Investor day).So many issues which ATM cannot control though..

1.Geopolitical issues(AUKUS) and (QUAD)
2."Ever exploding" Evergrande saga
3.Regulatory crackdown on chinese companies(IT and education)
4.samr registration coming up(2022 or 23?)

But with Australia opening up sooner than expected...We may see uptick on daigous...fingers crossed.

[dreamcatcher]

Merck’s new Covid pill could affect market action the week of Oct. 4https://www.cnbc.com/video/2021/10/01/jim-cramer-predicts-how-mercks-new-covid-pill-could-affect-the-market.html

[dobby41]

Merck’s new Covid pill could affect market action the week of Oct. 4https://www.cnbc.com/video/2021/10/01/jim-cramer-predicts-how-mercks-new-covid-pill-could-affect-the-market.html

Wrong thread?
Affects ATM how?

[McPussPuss]

Anything that may speed up the opening of borders (Australia & China) will affect the bottom line as the company and most analysts are being reasonably conservative by discounting any recovery in the daigou channel that was disproportionately relied upon for revenue growth.

[Waltzing]

China building a lot of 5 thousand bed MIQ for all incoming visitors.
If china vaccine is not up to the job then an open border is going to be a very slow border to get in and out off.

However there are market channel opening like KiwiSo. It just shows how deep the relationship between NZ and China has been build up over more than a century together.

The ATM game plan will hopefully swing back to one of a success story.

[xp04]

Citi believes there could be more bad news looming for A2 Milk. The broker is basing this on the fact that the company has yet to announce its performance rights for its CEO. It feels if things were going better, this would have now been announced.

Citi feels more bad news could weigh heavily on the A2 Milk share price. However, it also suspects that further share price weakness would make the company vulnerable to a takeover in or around the $7.00 per share mark. This is based on comparable acquisition multiples.

And judging by the company’s share price performance today, it appears as though some investors are focusing more on the potential takeover approach instead of the suspected continued underperformance of the company.

What’s next?

Time will tell how A2 Milk is actually performing. However, the good news is that investors won’t need to wait overly long to find out. The company is scheduled to hold its annual general meeting in approximately seven weeks.

All eyes will certainly be on A2 Milk shares that day.

Is there any reason you forgot to mention that your beloved citi has issued "buy" rating and AU$7.20 price target?

[Lease]

https://www.smh.com.au/politics/federal/australian-regulator-approves-chinese-covid-jab-sinovac-for-travellers-20211001-p58wdj.html

"More than 80,000 Chinese international students are set to be allowed back into Australia when international borders reopen after the country’s top drug regulator recommended approving the Sinovac vaccine for travellers."

[alokdhir]

SP is telling us something which many may have missed around $ 5.50 !!!!

[Balance]

SP is telling us something which many may have missed around $ 5.50 !!!!

Same way punters missed the sp rises (& subsequent falls) in July & August?

Let's see what DB delivers by way of strategy reset later this month.

[alokdhir]

Same way punters missed the sp rises (& subsequent falls) in July & August?

Let's see what DB delivers by way of strategy reset later this month.

I am not talking of rise and fall ...but paying attention to it not going below $ 5.40

[Balance]

I am not talking of rise and fall ...but paying attention to it not going below $ 5.40

Good point

[dreamcatcher]

Chinese Sinovac approved in Australia ........... .Students Daigou
Qantas increasing flights from 4rd Nov ........... Tourists Daigou
Australia's Flight Centre SP running hot .......... Shorts 22m 11% feeling the heat
Chinese Shopping Extravaganza 11/11............ 4 weeks away

A2M shorts 44m and shrinking 5.95% ............ Ouch? every stock has risk

[couta1]

Chinese Sinovac approved in Australia ........... .Students Daigou
Qantas increasing flights from 4rd Nov ........... Tourists Daigou
Australia's Flight Centre SP running hot .......... Shorts 22m 11% feeling the heat
Chinese Shopping Extravaganza 11/11............ 4 weeks away

A2M shorts 44m and shrinking 5.95% ............ Ouch? every stock has risk Shorts have made an absolute killing over the last year, longs have been incinerated, only time will tell if this ship ever becomes a luxury liner again.

[Sideshow Bob]

From the latest MFAT China update:

Infant FormulaAlthough the volume of infant formula sales to China increased more than 6% in the first half of 2021, the value of export earnings declined 12% relative to the equivalent period in 2020, largely due to lower infant formula prices in China so far this year. Increased production by Chinese domestic infant formula brands is possibly having an impact on prices.

13034

[Sideshow Bob]

Meanwhile for Dairy:

Dairy (not including infant formula)

The value of New Zealand’s dairy exports to China in the first half of 2021 totalled $3.7 billion, 39% above the equivalent period in 2020. The increased value of dairy exports in this period was largely due to greater revenue from milk powder (+46%), butter exports (+26%), and cheese (+45%), driven primarily by an increased volume of sales.

Recently released MPI forecasts indicate that demand for New Zealand products into China is likely to remain strong despite a possible medium-term slowdown as China expands its dairy herd. Demand from China has been the key driver of export revenue for New Zealand dairy exporters due to recovery from COVID-19, consumer demand for dairy products, and high feed prices (for domestic dairy herds) resulting in increased demand for imports.

According to China’s official trade data New Zealand remains China’s largest source of dairy imports. China’s imports of dairy products from all sources grew 22% in the first half of 2021, and imports from New Zealand grew 13%.

[carrom74]

Meanwhile for Dairy:

Dairy (not including infant formula)

The value of New Zealand’s dairy exports to China in the first half of 2021 totalled $3.7 billion, 39% above the equivalent period in 2020. The increased value of dairy exports in this period was largely due to greater revenue from milk powder (+46%), butter exports (+26%), and cheese (+45%), driven primarily by an increased volume of sales.

Recently released MPI forecasts indicate that demand for New Zealand products into China is likely to remain strong despite a possible medium-term slowdown as China expands its dairy herd. Demand from China has been the key driver of export revenue for New Zealand dairy exporters due to recovery from COVID-19, consumer demand for dairy products, and high feed prices (for domestic dairy herds) resulting in increased demand for imports.

According to China’s official trade data New Zealand remains China’s largest source of dairy imports. China’s imports of dairy products from all sources grew 22% in the first half of 2021, and imports from New Zealand grew 13%.

Thanks for the post. MVM”s acquisition could help as A2 milk bottom line can grow by exporting “other” milk products apart from infant formula. Diversified business model is better than vertical integration… I guess.

[Beagle]

https://www.nzherald.co.nz/business/aussie-law-firm-files-class-action-against-a2-milk/Y5GSMTENLOR2C7Y2XQDFDIYFFM/

Chance for New Zealand Investors to claim some of their losses back ?

[nztx]

https://www.nzherald.co.nz/business/aussie-law-firm-files-class-action-against-a2-milk/Y5GSMTENLOR2C7Y2XQDFDIYFFM/

Chance for New Zealand Investors to claim some of their losses back ?


could be quite a number of us ;)

how about the ones not coming forward who managed to score a gain ? ;)


Someone should talk to Slater & Gordon about a certain mining company .. ;)

[Balance]

Impressive performance by ATM shares today - green in a sea of red.

[couta1]

https://www.nzherald.co.nz/business/aussie-law-firm-files-class-action-against-a2-milk/Y5GSMTENLOR2C7Y2XQDFDIYFFM/

Chance for New Zealand Investors to claim some of their losses back ? Looking at the registration process it looks like its only for ASX registered shares. One question was how many shares did you sell between 19th Aug 2020 and 7th May 2021, if more than 10 lots please send documents, wonder if their system could cope with the amount of documents they would get from me. Lol

[Balance]

Looking at the registration process it looks like its only for ASX registered shares. One question was how many shares did you sell between 19th Aug 2020 and 7th May 2021, if more than 10 lots please send documents, wonder if their system could cope with the amount of documents they would get from me. Lol

There may not be enough cash in the bank to meet the damages (in the billions of dollars) awarded if ATM directors and ATM are found to be liable!

[couta1]

There may not be enough cash in the bank to meet the damages (in the billions of dollars) awarded if ATM directors and ATM are found to be liable! Looks like you don't have to register to be eligible at this stage, you are automatically eligible but will not be entitled to compensation unless you register once the court case starts. Anyway I have sent an enquiry re the eligibility of NZX holders so let's see. Perhaps a good use for their large unused cash pile has now been found. Lol

[Beagle]

I think its good they're being sued. The BBB team all thought their disclosure was egregiously slow. It'll be a good test case for disclosure requirements. ATM's best defense would appear to be our accounting and reporting systems are so pathetic we didn't know any better.
Another defense might be that the nature of our accounting and reporting system was such that they were fundamentally inadequate for the task at hand, (like the Titanic's rudders, inadequate for maneuvering quickly).

As far as corporate legal action goes, this is definitely going to be a VERY interesting case.

[carrom74]

The class action filing has definitely thrown the spanner in the works to the sp… would be an interesting day tomorrow…

[Baa_Baa]

The ‘class action’, so to speak has been open for some time now, it’s not news. It is an invitation to register interest, it is not guaranteed that there will be a suit. The funder will decide at some stage whether Slater & Gordon have a case and whether ATM has enough money to be worth going after, which obviously they have, notwithstanding company and director insurance.

[Baa_Baa]

Impressive performance by ATM shares today - green in a sea of red.

I tried to find where on the chart A2M (the market that matters) had put in 11 consecutive higher daily closing prices. I don't think it's ever done that before.

[Baa_Baa]

A class action has now been filed (https://www.nzx.com/announcements/380449) with the Supreme Court of Victoria.

To register interest (https://www.slatergordon.com.au/class-actions/current-class-actions/a2-milk-shareholder-class-action-investigation).


The ‘class action’, so to speak has been open for some time now, it’s not news. It is an invitation to register interest, it is not guaranteed that there will be a suit. The funder will decide at some stage whether Slater & Gordon have a case and whether ATM has enough money to be worth going after, which obviously they have, notwithstanding company and director insurance.

[alokdhir]

No need to register now ...All qualifying people who bought either on NZX or ASX during that period will automatically be included and when the time comes for the trial or judgement then we can decide to be included or excluded to get compensation if awarded

[see weed]

Looking at the registration process it looks like its only for ASX registered shares. One question was how many shares did you sell between 19th Aug 2020 and 7th May 2021, if more than 10 lots please send documents, wonder if their system could cope with the amount of documents they would get from me. Lol
a2 dragged my portfolio down about somewhere between 300 and $400k But only locked in about $144,000 in losses between 19/8/20 and 7/5/21 over 31 transactions. I would be very happy to get something back. PS that loss doesn't include profit, but am still down about 400k. Not a holder of a2 at the moment.:)

[Maxtrade]

No need to register now ...All qualifying people who bought either on NZX or ASX during that period will automatically be included and when the time comes for the trial or judgement then we can decide to be included or excluded to get compensation if awarded

Has that been confirmed ATM shares purchased on NZX will also still be valid for compensation? Not just A2M on ASX

SP going to tank back down maybe testing new low sub 5.4 now. Very strong case against ATM and management. Get out now while you can. Any hope of buyout getting less appealing. Maybe previous posts of SP reaching $3.5 are not too unrealistic. Might be attractive enough around $3-$3.5 for some takeover interest?

[Balance]

Has that been confirmed ATM shares purchased on NZX will also still be valid for compensation? Not just A2M on ASX

SP going to tank back down maybe testing new low sub 5.4 now. Very strong case against ATM and management. Get out now while you can. Any hope of buyout getting less appealing. Maybe previous posts of SP reaching $3.5 are not too unrealistic. Might be attractive enough around $3-$3.5 for some takeover interest?

It’s clear NZX shares are included in the action.

https://www.slatergordon.com.au/class-actions/current-class-actions/a2-milk-shareholder-class-action-investigation

There is no good outcome for ATM from this class action - either there was breach of CC or there was gross mismanagement.

And yes, any takeover potential will now be put on hold as there’s billions of dollars of potential damages to be awarded here.

[LEMON]

"Hating" a stock is as bad as "loving" a stock. Everyone loses money on a position sometimes. It is inevitable, no matter what anyone says on here. You are going to lose money sometimes. It does not mean you "screwed up". It just means you got that trade wrong. We are all wrong at times and we will all be wrong again in the future.


It’s clear NZX shares are included in the action.

https://www.slatergordon.com.au/class-actions/current-class-actions/a2-milk-shareholder-class-action-investigation

There is no good outcome for ATM from this class action - either there was a breach of CC or there was gross mismanagement.

And yes, any takeover potential will now be put on hold as there are billions of dollars of potential damages to be awarded here.

Let's not forget the sell-off from the board whilst the SP was in or near the highs of $20, then thereafter a never-ending spiral of decline in the SP, whilst the board promoted a solid plan will be put I place to continue the growth from a small/minor step back due to Covid! Lol

[alokdhir]

Has that been confirmed ATM shares purchased on NZX will also still be valid for compensation? Not just A2M on ASX

SP going to tank back down maybe testing new low sub 5.4 now. Very strong case against ATM and management. Get out now while you can. Any hope of buyout getting less appealing. Maybe previous posts of SP reaching $3.5 are not too unrealistic. Might be attractive enough around $3-$3.5 for some takeover interest?Who are Slater and Gordon investigating?The a2 Milk Company Limited (a2 Milk)
Is this relevant to me?If you purchased a2 Milk shares on the ASX or NZX between 19 August 2020 and 7 May 2021 inclusive.
What does investigating mean?Slater and Gordon are investigating the merits of a claim against a2 Milk, but have not yet formally commenced a Class Action by issuing proceedings in court. If a class action against a2 Milk is commenced and you have registered your interest, we will get in touch with you closer to that time and provide you with more information.
How do I register my interest?To keep updated as the investigation progresses, register your interest through the form below. It does not and will not cost you anything.

[see weed]

Has that been confirmed ATM shares purchased on NZX will also still be valid for compensation? Not just A2M on ASX

SP going to tank back down maybe testing new low sub 5.4 now. Very strong case against ATM and management. Get out now while you can. Any hope of buyout getting less appealing. Maybe previous posts of SP reaching $3.5 are not too unrealistic. Might be attractive enough around $3-$3.5 for some takeover interest?
Can I still make a claim even though I have already sold out at a loss?

[alokdhir]

Can I still make a claim even though I have already sold out at a loss?

Of course ....Pls read the FAQ on website of lawyers ...all very clear

[see weed]

Of course ....Pls read the FAQ on website of lawyers ...all very clear
Thank you, I will.

[Balance]

Let's not forget the sell-off from the board whilst the SP was in or near the highs of $20, then thereafter a never-ending spiral of decline in the SP, whilst the board promoted a solid plan will be put I place to continue the growth from a small/minor step back due to Covid! Lol

That sell down by the board and management is the most damning red flag (and potential evidence of lack of CC) imo.

Will be interesting to see how ASX reacts to the news when it opens today.

Last thing that DB as new CEO needs - a major distraction when he needs to focus 100% on the strategy reset & implementation.

[bibbidybop]

I assume this applies to individuals that purchased shares during the claim period 19 August 2020 and 7 May 2021 but still foolishly holding?

[Beagle]

That sell down by the board and management is the most damning red flag (and potential evidence of lack of CC) imo.

Will be interesting to see how ASX reacts to the news when it opens today.

Last thing that DB as new CEO needs - a major distraction when he needs to focus 100% on the strategy reset & implementation.

Agree 100%. What I found most interesting about this whole thing is the original outlook guidance for FY21 issued at the time of the FY20 result. The overall tone of that did not reflect the reality of the situation in my opinion and this was not adjusted down to more realistic settings until after the insiders had dumped massive numbers of shares.

There's definitely a case to answer here.

[winner69]

Balance - do they have QCs in Australia

Got to use QCs for these sort of things

[Sideshow Bob]

Know it is a long way down the track, but the end game for S&G is win and financial compensation. Presumably would be from liability insurance primarily, rather than from ATM itself?

[Balance]

So will the shorters be out in force on ASX today now that the ‘threat’ of a potential takeover is pushed out into the distance?

[Beagle]

Outlook
FY21
• Globally, there continues to be uncertainty resulting from COVID-19, and the potential for moderation of economic activity. This could impact
consumer behaviour in our core markets, as well as participants within the supply chain, most notably in China
• Notwithstanding these uncertainties, overall for FY21, we anticipate continued strong revenue growth supported by our continued investment in
marketing and organisational capability
• FY21 EBITDA margin is expected to be in the order of 30% to 31%
--------------------------------------------------------------------------------------------------------------------------------------------
Those are the words that will get them in hot water, in my opinion.

[alokdhir]

So will the shorters be out in force on ASX today now that the ‘threat’ of a potential takeover is pushed out into the distance?

It mayn't be that simple . Its possible suitor had encouraged Slater & Co to file this case ...9.5/10 ...nothing will come out of that ...just scare tactics for retail investors .

Also possible suitor will take expert legal advise on this issue and will know no damage will be done to business or company but only useful for beating the SP down

NZX reaction is always amateurish ...Lets see what ASX big punters think about it ...Me is betting that its very possible they bring it back like yesterday

[sb9]

It mayn't be that simple . Its possible suitor had encouraged Slater & Co to file this case ...9.5/10 ...nothing will come out of that ...just scare tactics for retail investors .

Also possible suitor will take expert legal advise on this issue and will know no damage will be done to business or company but only useful for beating the SP down

NZX reaction is always amateurish ...Lets see what ASX big punters think about it ...Me is betting that its very possible they bring it back like yesterday

Well said, with a once in 100 year pandemic event like Covid, I see this class action is just some opportunistic campaign by S&G.

[Balance]

It mayn't be that simple . Its possible suitor had encouraged Slater & Co to file this case ...9.5/10 ...nothing will come out of that ...just scare tactics for retail investors .

Also possible suitor will take expert legal advise on this issue and will know no damage will be done to business or company but only useful for beating the SP down

NZX reaction is always amateurish ...Lets see what ASX big punters think about it ...Me is betting that its very possible they bring it back like yesterday

On cue, out comes the conspiracy theory.

All the conspiracies of the big fund managers manipulating A2M during the collapse of the sp last year (so they can buy cheap) cost retail investors big time last year.

[alokdhir]

On cue, out comes the conspiracy theory.

All the conspiracies of the big fund managers manipulating A2M during the collapse of the sp last year (so they can buy cheap) cost retail investors big time last year.

Only time will tell but was just exploring the possibilities ...Its not that simple in modern world anymore ...not all that glitters is gold and not all that looks super pessimistic actually is that bleak ....No axe to grind ....just talking possibilities

[Beagle]

I followed this whole fiasco very closely and made wide ranging observations over many many months as did Balance and Bull.

Is there a case to answer here ? That's like asking is the Pope a Catholic lol

[peat]

they even mention growth in their statement re defending the action

just cant learn!!

[Ggcc]

I followed this whole fiasco very closely and made wide ranging observations over many many months as did Balance and Bull.

Is there a case to answer here ? That's like asking is the Pope a Catholic lol
Nothing will come of this other than a slap on the hands. I have never seen or heard a class action law suit be won in NZ, on a NZX traded company other than the one Jenny Shipley was in. Plus directors are insured up to the eyeballs, which means powerful lawyers on their side. Wynyard was worse than this and all directors walked off Scott free.

[dreamcatcher]

The three B's eh..........here is three more and an R .......Blah Blah Blah Rubbish

[aperitif]

https://retirementtipsandtricks.com/things-to-do-when-youre-retired-and-bored/

[alokdhir]

So far ASX is not showing any panic selling ...:D

[Ggcc]

https://retirementtipsandtricks.com/things-to-do-when-youre-retired-and-bored/
Now these are some great ideas. Thanks for sharing

[sb9]

So far ASX is not showing any panic selling ...:D

Big fish will suck all reef ones...seen it all time and again.

[alokdhir]

I tried to find where on the chart A2M (the market that matters) had put in 11 consecutive higher daily closing prices. I don't think it's ever done that before.

Most likely 12th Day of up move today !!!!:ohmy:

[Balance]

Most likely 12th Day of up move today !!!!:ohmy:

That would be most impressive!

[alokdhir]

That would be most impressive!

If that happens then it will be almost sure sign of something positive coming ...either on business front or Take-over side ....what say u ?

[alokdhir]

BBB- effect has started showing ...ATM started its humty dumty fall as its got negative ratings from BBB ...:p

[aperitif]

Recently, New Zealand infant formula dairy production enterprises in China registration list updated, details as follows: (General Administration of Customs)

13047

https://mp.weixin.qq.com/s/QhKJ7ZMBLtg2NhqZY1oTEQ

[Beagle]

The three B's eh..........here is three more and an R .......Blah Blah Blah Rubbish

The three musketeers have a superb track record with this one. I'm calling it. This will get settled out of court for several hundred million and after egregious lawyers fees those that lost money will get a few cents back per dollar. Market cap down $350m since this class action lawsuit was filed.

[Balance]

The three B's eh..........here is three more and an R .......Blah Blah Blah Rubbish

Having nightmares instead of dreams, dreamcatcher? :D

Closed down on ASX at today's low A$6.02.

[nztx]

The three musketeers have a superb track record with this one. I'm calling it. This will get settled out of court for several hundred million and after egregious lawyers fees those that lost money will get a few cents back per dollar. Market cap down $350m since this class action lawsuit was filed.


probably more than a few cents being dished out if this is the way it goes.. if the payouts on their website is any indication :)

I'd say there is fairly hefty stack of red ink during the purchase dates, based on the decline from $18 or so at the beginning
to $6/$7 at the end .. those sitting on ATM for the duration could be down by more than 50%

[couta1]

a2 dragged my portfolio down about somewhere between 300 and $400k But only locked in about $144,000 in losses between 19/8/20 and 7/5/21 over 31 transactions. I would be very happy to get something back. PS that loss doesn't include profit, but am still down about 400k. Not a holder of a2 at the moment.:) Just checked, I lost just over 2 mill during that period excluding brokerage, not counting on getting any of it back but even 5% would be worth it.

[777]

And ATM closed at 638 although Direct show 650.46 in the portfolio page. This being a WA settle up after close.

[nztx]

Will just a mere couple of hundred mil cover all the red ink out there ? ;)

Theoretically the ceiling could be all the issued shares @ $12 something - but there will be those outside the purchase period
or choose not to register / follow the claim .. ;)

How much do ATM have in the bank again ?

What's the max cover from insurers ?

Could Auditors get roped in as contributories ? ;)

Add a bundle of Advisors ?

What a potentially jumbled up expensive mess that could become ;)

Another Cap Raise needed to cover the all the carnage perhaps ? ;)

[nztx]

Is it too late to short ATM ? ;)

[Beagle]

Will just a mere couple of hundred mil cover all the red ink out there ? ;)

Theoretically the ceiling could be all the issued shares @ $12 something - but there will be those outside the purchase period
or choose not to register / follow the claim .. ;)

How much do ATM have in the bank again ?

What's the max cover from insurers ?

Could Auditors get roped in as contributories ? ;)

Add a bundle of Advisors ?

What a potentially jumbled up expensive mess that could become ;)

Another Cap Raise needed to cover the all the carnage perhaps ? ;)

Just as well they didn't waste precious cash reserves buying back their own shares lol

[Balance]

Just checked, I lost just over 2 mill during that period excluding brokerage, not counting on getting any of it back but even 5% would be worth it.

Sincerely hope you will recoup some if not all your losses through the class action, couta1.

4 downgrades in a row and with the company providing bullish commentaries with each of the downgrades, save the last one, showed something seriously amiss with the board and management. Especially with the sale of shares by them just prior to the first downgrade.

[Balance]

Just as well they didn't waste precious cash reserves buying back their own shares lol

Given the billions of dollars wiped from the portfolios of shareholders over the period of the profit downgrades, there could be bugger all left in ATM if the court case is successful.

And remember this - ATM is an NZ company and the Aussies love nothing more than working a NZ company over.

[Beagle]

Given the billions of dollars wiped from the portfolios of shareholders over the period of the profit downgrades, there could be bugger all left in ATM if the court case is successful.

And remember this - ATM is an NZ company and the Aussies love nothing more than working a NZ company over.

Yes....Good points.

[dreamcatcher]

The three musketeers have a superb track record with this one. I'm calling it. This will get settled out of court for several hundred million and after egregious lawyers fees those that lost money will get a few cents back per dollar. Market cap down $350m since this class action lawsuit was filed.

I'm calling this will go nowhere or at best as you indicate a few cents worth.

Curious what amount insto's held during this period but profited by SP going downwards with those 60m shorts and daily traders playing a part. Am I correct losers pay both legal costs and wonder if there are any IRD implications here for Kiwis who expose themselves as traders.

[nztx]

I'm calling this will go nowhere or at best as you indicate a few cents worth.

Curious what amount insto's held during this period but profited by SP going downwards with those 60m shorts and daily traders playing a part. Am I correct losers pay both legal costs and wonder if there are any IRD implications here for Kiwis who expose themselves as traders.


Filing in Supreme Court in WA in the Burnt Land over the way - wasn't it ? ;)

I wouldn't be so sure of the Aussie Justice system delivering only cents in the dollar ;)

it might be different here with a Kiwi beak presiding however .. but it isn't, it appears ;)

[Beagle]

Just checked, I lost just over 2 mill during that period excluding brokerage, not counting on getting any of it back but even 5% would be worth it.

https://www.slatergordon.com.au/ Nice lady has a good message for you.
Maybe some reflections on what learnings you can take away from this fiasco could be a good idea...

[dreamcatcher]

Having nightmares instead of dreams, dreamcatcher? :D

Closed down on ASX at today's low A$6.02.

We all know how deceiving shorts are masking today's combined 14m trades been used to reduce their positions on shortman.com

But today was not about a2 S&G class action but reduced stimulus and 0.5% interest rate increase announced by NZRB

No nightmare just ALL FREE :p DREAMS and well positioned on housing and retail.

[see weed]

Just checked, I lost just over 2 mill during that period excluding brokerage, not counting on getting any of it back but even 5% would be worth it.
Wow:scared:. I always try and make a positive out of a loss. If you are a trader then you will not have to pay tax for a long time on all your gains. Beagle would know more about that sort situation than me. I remember someone saying something a while back about a lot of investors became traders in the 1987 crash. Good luck with your future trading and make heaps of money tax free for a while:).

[stoploss]

We all know how deceiving shorts are masking today's combined 14m trades been used to reduce their positions on shortman.com

But today was not about a2 S&G class action but reduced stimulus and 0.5% interest rate increase announced by NZRB

No nightmare just ALL FREE :p DREAMS and well positioned on housing and retail.
DC, it was a .25% increase from the RBNZ to 0.5% for the OCR.

[Master98]

https://www.slatergordon.com.au/people/kaitlin-ferris
background of the lawyer.

[percy]

Wow:scared:. I always try and make a positive out of a loss. If you are a trader then you will not have to pay tax for a long time on all your gains. Beagle would know more about that sort situation than me. I remember someone saying something a while back about a lot of investors became traders in the 1987 crash. Good luck with your future trading and make heaps of money tax free for a while:).

Correct.
Yes a great number of investors became traders and did not pay tax for years.

[Balance]

https://www.slatergordon.com.au/people/kaitlin-ferris
background of the lawyer.

Ignore the smile on the face, look at the eyes. This lady takes no prisoners!

[couta1]

DC, it was a .25% increase from the RBNZ to 0.5% for the OCR. Yep just a blip and not the reason for yesterday's fall.

[couta1]

Wow:scared:. I always try and make a positive out of a loss. If you are a trader then you will not have to pay tax for a long time on all your gains. Beagle would know more about that sort situation than me. I remember someone saying something a while back about a lot of investors became traders in the 1987 crash. Good luck with your future trading and make heaps of money tax free for a while:). Yep no tax to pay on any trading activity for life most probably, unfortunately I cant claim any back because I don't have enough income from other sources so loss will be carried forward on paper until im using a zimmer frame and beyond.

[Beagle]

Ignore the smile on the face, look at the eyes. This lady takes no prisoners!

I wouldn't pick a legal fight with her BUT only 9 years commercial experience and no really massive settlements. Hmmm Good luck folks.

See weed - The problem with massive trading losses carried forward is they only have any real value if one has the skills to beat the market with one's trading strategy going forward. I reckon its a healthy thing for everyone at least once a year to stand back and have a really good honest stocktake about their investment strategies and methodologies and ask themselves is what I am doing really working ? Am I beating the market and if not would I be better off handing some or all of my investments over to professional fund managers or simply buying ETF's instead ?

I regularly do this. If I find I am not beating the market, (hasn't happened yet), for more than 2 years in a row I'll be handing everything over to be managed professionally and go fishing instead.

[dreamcatcher]

DC, it was a .25% increase from the RBNZ to 0.5% for the OCR.

Thanks..........correct my bad jumped the gun a few months

[Maxtrade]

Who are Slater and Gordon investigating?

The a2 Milk Company Limited (a2 Milk)
Is this relevant to me?

If you purchased a2 Milk shares on the ASX or NZX between 19 August 2020 and 7 May 2021 inclusive.
What does investigating mean?

Slater and Gordon are investigating the merits of a claim against a2 Milk, but have not yet formally commenced a Class Action by issuing proceedings in court. If a class action against a2 Milk is commenced and you have registered your interest, we will get in touch with you closer to that time and provide you with more information.
How do I register my interest?

To keep updated as the investigation progresses, register your interest through the form below. It does not and will not cost you anything.


When registering, having difficulty getting the site to accept an NZ address. Has anyone else had the same issue?

[Poet]

When registering, having difficulty getting the site to accept an NZ address. Has anyone else had the same issue?

I managed to use NZ address but did have to pretty much fill something into all of the fields. Also, asks for share prices in AUD and no facility to change to NZD (I just did a rough conversion at 0.95)

Like Couta, I was down seven figures on this so something back would be good

[rheesj7]

When registering, having difficulty getting the site to accept an NZ address. Has anyone else had the same issue?
Put your address number only on the address 1 then put rest of your address on the address 2.

[Balance]

https://www.rnz.co.nz/news/business/453033/class-action-suit-against-a2-milk-expected-to-represent-thousands

This is the interesting bit :

"We allege that A2 boosted sales in FY20 by pushing what's called English-label [infant] formula tins through the cross-border e-commerce channel [into China] and as a result of that, the daigou channel, which is an important sales channel for A2 ... weren't able to achieve the margin on the product when it was sold to their end-consumers in China ... because there was a flood of stock in the market."

[Beat the Bank]

When registering, having difficulty getting the site to accept an NZ address. Has anyone else had the same issue?
Yes. I had this problem too. I had a flash back memory about leaving the "state" box empty, and added NZ or NZL to the state question, and it works. Then it asked for AU$ and I just ignored that and did NZ$. Lastly, after that registration phase, it then sets in progress more paperwork to sign which it says is optional, as indeed the whole thing appears to be. I hesitated and left it at the registration stage.
My thoughts go to Couta1 and Poet for your large losses. For some a $10,000 investment is huge and for others it is $1 mill. Same applies to losses.
I would like to see the management held to account for their actions to set an reminder for other managers.

[Poet]

I just listened to the conference call from the other day.

Certainly, as is to be expected, a lot of attempted butt-covering going on by the board and management

"we did caveat our forecasts when we made them" etc etc

Putting that aside though, IMO the analyst from Bank of America asked the most pertinent question of Jeff B (around the 22 minute mark)

The question was along the lines of

"how can we be sure that the information systems that ATM has in place are appropriate and timely given that we analysts, and ATM itself, have now been blindsided with two sudden and unexpected profit downgrades in the space of just a couple of months"

Babbage's reply was along the lines of

"yes, we believe that our information systems are timely and appropriate, if we had known any extra information at the time of our AGM (which was late November) we would have revised our guidance then"

After a bit more butt-covering he went on to state

"I am looking at the finalised sales numbers to the end of November (ie as at the time of this conference call) and I can tell you they are not materially different to what we were forecasting when we issued our guidance and I can categorically tell you that EBITDA numbers are not below what we were forecasting. December was always going to be a big month and it became clear last week that December wouldn't meet expectations"

So, it would appear, to me at least, that to go from a first half revenue projection of 725-775m down to $670m given that everything was rosy up until the end of November must mean that December sales have absolutely collapsed (or is there another way to look at this)

I personally think that these people are engaging in magical thinking, and just continually pushing out the miracle recovery that is just on the horizon - "didn't happen in December, not to worry, we will just assume it will happen in the second half year"

Be very afraid people

Discl - out yesterday

At the risk of quoting myself - the above post from 22 December last year.

I think that this type of analysis will be what the lawyers will use to nail the ATM board. Basically the board and management forecasts and statements were not only egregious examples of magical/fantasy thinking but, on the face of it, they weren't even consistent with one another from one week to the next as per my example above.

Will be interesting to watch this play out

[see weed]

I wouldn't pick a legal fight with her BUT only 9 years commercial experience and no really massive settlements. Hmmm Good luck folks.

See weed - The problem with massive trading losses carried forward is they only have any real value if one has the skills to beat the market with one's trading strategy going forward. I reckon its a healthy thing for everyone at least once a year to stand back and have a really good honest stocktake about their investment strategies and methodologies and ask themselves is what I am doing really working ? Am I beating the market and if not would I be better off handing some or all of my investments over to professional fund managers or simply buying ETF's instead ?

I regularly do this. If I find I am not beating the market, (hasn't happened yet), for more than 2 years in a row I'll be handing everything over to be managed professionally and go fishing instead.
No, I am not done yet. Sold my last lot of a2 on 17/5/21 for $105,000 profit. That falls out of the time frame of 19/8/20 to 7/5/21 period. Am already up $18,000 plus on WHS in last few weeks, plus $12,000 on CEN, but will not mention ZEL which is up $10,000 plus at the moment, don't know what is going to happen there. Forgot to mention $50,000 divs since 1/3/21. No, I am not going to let a2 and shorters scare me off;).

[bull....]

people should always wonder why ? a stock has a large short interest and dig deeper.

[Maxtrade]

people should always wonder why ? a stock has a large short interest and dig deeper.

Surprised to not see the SP drop steadily today. Got to have nerves of steel to hold at this stage. Bottom likely to drop out on every bit of negative news as law suit progresses. ATM management really dug a grave for it's loyal shareholders and deceived the market entirely. Highly likely going to really bite them back now. Too obvious, too public, it's just a matter of how badly they will be stung.

The big boys will know this and be lurking at the bottom factoring in a huge payout which may then lead to a buy out option but at much lower levels, even lower than the $3/$3.50 fundamental based SP previously stated in this thread.
SP currently being propped up while slowly but steadily reducing portfolios, followed by large shorts, SP surely will plummet over this next month as lawsuit gains motion. Unfortunately the company brought it upon itself. Sad, especially for a golden child NZ company. Shows the importance of transparency and solid open management.

Best of luck to the optimists. The risks are too high for me, I'm out.

[Balance]

Wow, 5 whole days without a single posting on this previous market darling and superstar!

So what are the brokers saying?

Has the A2 Milk share price found a bottom yet?

Unfortunately for shareholders, one leading broker doesn’t appear to believe the A2 Milk share price has found its bottom just yet.

A note out of Credit Suisse from last week reveals that its analysts have retained their underperform rating and $5.50 price target on the company’s shares.

Based on the current A2 Milk share price, this implies potential downside of 7% over the next 12 months.

What did the broker say?

According to a note from Credit Suisse, the broker highlights that infant formula prices stabilised in China in September.

It also notes that marketing activity is increasing and chat groups have been formed with daigou shoppers ahead of the major Singles Day retail sales event next month.

However, this isn’t enough for the broker to change its rating. It has previously voiced its concerns over China’s slowing birth rate and A2 Milk’s loss of market share in stage 1 infant formula. Credit Suisse fears that the latter could act as a drag on its Stage 2 and Stage 3 product sales as this cohort ages.

Is anyone positive?

One broker that remains positive on the A2 Milk share price is Citi. It recently put a buy rating and $7.20 price target on the company’s shares.

However, it has warned that there could be more bad news coming at its investor event later this month. This could include lower than expected margins.

The only potential benefit here is that that broker suspects that any weakness in A2 Milk’s shares could be greeted with a takeover offer.

Time will tell which broker makes the right call.

[Baa_Baa]

Huge drop in Short positions (https://www.shortman.com.au/stock?q=A2M) last week.

[couta1]

Huge drop in Short positions (https://www.shortman.com.au/stock?q=A2M) last week. That 4% line is the benchmark, perhaps they don't see enough downside from here to make it worthwhile staying in after making huge profits over the last year, i haven't held any for over a month now(First time in 8 yrs in that situation) and I have no intention of trying to make any losses back from this hot potato.

[Muse]

That 4% line is the benchmark, perhaps they don't see enough downside from here to make it worthwhile staying in after making huge profits over the last year, i haven't held any for over a month now(First time in 8 yrs in that situation) and I have no intention of trying to make any losses back from this hot potato.

I got out of this and never look back. The trials and tribulations of this company soaked up too much of my attention and emotional energy.

[dreamcatcher]

Believe UBS PT still $11 ..........Darts ready for Spin The Wheel Game

[JohnnyTheHorse]

Huge drop in Short positions (https://www.shortman.com.au/stock?q=A2M) last week.

That's an important observation and highly likely the driver for the price increases the previous couple of weeks. I reiterate my previous comments that ever bounce that occurs without a weekly trend change is no to be trusted. It is most likely just just momentum traders and shorts covering as the price gets higher and higher.

The weekly chart paints the best picture. There's heaps of detail I could add, however it boils down to a weekly downtrend that's still intact. A loose downtrending resistance line is worth watching too. With this is place there's no reason to be positive. Change that weekly trend and things could get interesting (I wouldn't bet on that happening though...). Daily price action is ultimately just noise.

Buying or shorting looking for weekly highs/lows has been very profitable.

13088

[Balance]

https://businessdesk.co.nz/article/primary-sector/hundreds-sign-up-for-a2-milk-class-action

Paywalled

Hundreds sign up for class action against A2M.

Looking like damages against A2M are going to be in the billions of dollars if the class action is successful.

[RupertBear]

That's an important observation and highly likely the driver for the price increases the previous couple of weeks. I reiterate my previous comments that ever bounce that occurs without a weekly trend change is no to be trusted. It is most likely just just momentum traders and shorts covering as the price gets higher and higher.

The weekly chart paints the best picture. There's heaps of detail I could add, however it boils down to a weekly downtrend that's still intact. A loose downtrending resistance line is worth watching too. With this is place there's no reason to be positive. Change that weekly trend and things could get interesting (I wouldn't bet on that happening though...). Daily price action is ultimately just noise.

Buying or shorting looking for weekly highs/lows has been very profitable.

13088

helpful, thanks

[dreamcatcher]

https://businessdesk.co.nz/article/primary-sector/hundreds-sign-up-for-a2-milk-class-action

Paywalled

Hundreds sign up for class action against A2M.

Looking like damages against A2M are going to be in the billions of dollars if the class action is successful.

When is this going to court ??............ next week, next year, next century

[Beagle]

https://businessdesk.co.nz/article/primary-sector/hundreds-sign-up-for-a2-milk-class-action

Paywalled

Hundreds sign up for class action against A2M.

Looking like damages against A2M are going to be in the billions of dollars if the class action is successful.

Not just those that have written the professional indemnity insurance contracts that should be worried. Gross negligence is often not covered and might sheet home to the directors personally as well as the management and the company. They should be quaking in their boots, they have a very serious case to answer. Insiders who sold large parcels of shares immediately after saying there was strong growth ahead might be a good target too.
Name them all as defendants and get on with it.

[Master98]

https://businessdesk.co.nz/article/primary-sector/hundreds-sign-up-for-a2-milk-class-action

Paywalled

Hundreds sign up for class action against A2M.

Looking like damages against A2M are going to be in the billions of dollars if the class action is successful.
This legal action could last for years, creating great uncertainty to share price, it is really not good, best scenario for A2 milk may be this case settled outside court with fork out hundred of millions dollars.

[Balance]

This legal action could last for years, creating great uncertainty to share price, it is really not good, best scenario for A2 milk may be this case settled outside court with fork out hundred of millions dollars.

Basically it also means there will be no potential takeover possibility until such time as the class action is finished, one way or the other.

[Brain]

Always best to stay well clear of companies involved in litigation. It is a huge distraction to the running of a company and even more so if the directors and management are personally liable.

[Balance]

This legal action could last for years, creating great uncertainty to share price, it is really not good, best scenario for A2 milk may be this case settled outside court with fork out hundred of millions dollars.

Doubt A2M will do that as there’s billions of dollars at stake and any settlement could open up the floodgates from those standing on the sidelines?

[Balance]

But all is not lost.

https://www.fool.com.au/2021/10/08/top-broker-tips-a2-milk-asxa2m-share-price-to-jump-30/

Bell Porter bullish on A2M - believes stock is on recovery path & trading on undemanding metrics.

[couta1]

But all is not lost.

https://www.fool.com.au/2021/10/08/top-broker-tips-a2-milk-asxa2m-share-price-to-jump-30/

Bell Porter bullish on A2M - believes stock is on recovery path & trading on undemanding metrics. Lol $7.70 is still eons away from $20 odd and thats a bullish target.

[Balance]

Lol $7.70 is still eons away from $20 odd and thats a bullish target.

Why would anyone bother with a 30% upside on a stock which is trading on very demanding multiples again at a backdrop of micro & macro headwinds?

[Lease]

https://www2.asx.com.au/markets/company/bub

BUB today's presentation: China: All channels in High Growth.

Can't see any reasons why ATM is unable to do the same given the fact A2 is a much stronger brand.

[sb9]

https://www2.asx.com.au/markets/company/bub

BUB today's presentation: China: All channels in High Growth.

Can't see any reasons why ATM is unable to do the same given the fact A2 is a much stronger brand.

Couldn't agree more. When is stock is beaten and written off (close to) by wider market, expect the unexpected. Not saying it'll move back to $20 rapidly but if things tracking well $10 could be here very soon.

[dreamcatcher]

https://www2.asx.com.au/markets/company/bub

BUB today's presentation: China: All channels in High Growth.

Can't see any reasons why ATM is unable to do the same given the fact A2 is a much stronger brand.

Love the headline China: ALL CHANNELS IN HIGH GROWTH

[Baa_Baa]

https://www2.asx.com.au/markets/company/bub

BUB today's presentation: China: All channels in High Growth.

Can't see any reasons why ATM is unable to do the same given the fact A2 is a much stronger brand.

That's an amazing turnaround by BUB.

[Maxtrade]

Up 8% today. Have ATM actually had any news today to warrant such a rise. Or is it simply off the back of BUB? Seems an unusually strong daily rally for ATM with the lawsuit in gear.

[couta1]

Up 8% today. Have ATM actually had any news today to warrant such a rise. Or is it simply off the back of BUB? Seems an unusually strong daily rally for ATM with the lawsuit in gear. Just the flow on hype from Bubs.

[Baa_Baa]

"Demand for Bubs infant formula in the daigou channel surged 6.5 times on the prior year and rose 265 per cent quarter-on-quarter,"

https://www.afr.com/companies/retail/bubs-stages-major-recovery-in-q1-sales-20211012-p58z7q

[Maxtrade]

Weird how volatile ATM is now for a stock. The lawsuit isn't going away in a hurry, so surprised that many folk would jump on the back of a different companies fortune almost forgetting about the very recent negative news ATM faces. Markets are non sensical these days. Short term trade gamblers maybe, in and out. Sell off again sub 6.8 and back down 10% within the next week? Day traders delight. Billions of dollars payout sure will hurt and won't help company fundamentals and SP.

[aperitif]

Weird how volatile ATM is now for a stock. The lawsuit isn't going away in a hurry, so surprised that many folk would jump on the back of a different companies fortune almost forgetting about the very recent negative news ATM faces. Markets are non sensical these days. Short term trade gamblers maybe, in and out. Sell off again sub 6.8 and back down 10% within the next week? Day traders delight. Billions of dollars payout sure will hurt and won't help company fundamentals and SP.

Mate, go and take a breather and educate yourself.

[dreamcatcher]

Shorts 5.65% = 42m Oct.6th interesting to see next few weeks

[Balance]

Nice to see some price action!

[Getty]

Just the flow on hype from Bubs.

Speaking of Bubs, dont forget the Evergrande baby needs burping.

If it falls out of its high chair, there will be some spilt milk..

[JohnnyTheHorse]

What a difference a day makes eh? I expect a sustained rise from short covering if AU$6.55 breaks.

[aperitif]

Trading suspended in HK this morning too, spill over into a2

[JohnnyTheHorse]

What a difference a day makes eh? I expect a sustained rise from short covering if AU$6.55 breaks.

And there's the break. Hindsight would say that the big drop in shorts was smart money? Serious pressure on short positions now. Relentless price action today just looks like momentum traders punishing the short positions with stops constantly being hit.

Disc: assisting in punishing the shorts today.

[alex f]

I wonder why, end of AU lockdowns ? Still no students or tourists. Shipping still expensive. What sort of $ value are we talking about? 6.5 x on the prior year, 2.65 x on previous quarter, I doubt much was being traded in those prior periods.

[Lease]

I wonder why, end of AU lockdowns ? Still no students or tourists. Shipping still expensive. What sort of $ value are we talking about? 6.5 x on the prior year, 2.65 x on previous quarter, I doubt much was being traded in those prior periods.

Regardless what you think, BUB shows China market is still in strong demand for quality western products. Plus borders are to open and life will gradually return to normal. Put all together, the future looks brilliant.

[nztx]

Speaking of Bubs, dont forget the Evergrande baby needs burping.

If it falls out of its high chair, there will be some spilt milk..


I hear they have found a second baby & parked a cot alongside to keep the first company ;)

Now both are wearing alike Red "De-Fault" Attire so they can't get lost .. ;)

Hope both are on Good Aye Two ;)

[dreamcatcher]

I wonder why, end of AU lockdowns ? Still no students or tourists. Shipping still expensive. What sort of $ value are we talking about? 6.5 x on the prior year, 2.65 x on previous quarter, I doubt much was being traded in those prior periods.

Trading in last 30days Bubs = 114M .......a2 = 191M

[Akane]

It's almost shorts knew the SP is gonna go up, a good few days ahead........ that's the power of insider information, something that you and I won't have access to.
That's why they're on a yacht in the Mediterranean, and you and I are grinding in front of our work computer :D

[Balance]

It's almost shorts knew the SP is gonna go up, a good few days ahead........ that's the power of insider information, something that you and I won't have access to.
That's why they're on a yacht in the Mediterranean, and you and I are grinding in front of our work computer :D

It’s competitive world out there and there are investors/institutions who pay generously for information (not insider information but industry sourced) to be ahead of the pack.

[JohnnyTheHorse]

Expecting a gap up open on the ASX into a good push, then hourly consolidation into the afternoon.

[Hoop]

It's almost shorts knew the SP is gonna go up, a good few days ahead........ that's the power of insider information, something that you and I won't have access to.
That's why they're on a yacht in the Mediterranean, and you and I are grinding in front of our work computer :D
**I've highlighted you post.
You might not have access but you can still know something is happening by using TA..
With ATM insider trading was masked by numerous players playing the shorting game and ampifying the negative media noise..However being a chartist I could sense the underlying changing behaviour. In hindsight my entry actions were too early and I sold out late July to realise a -10%...A 10 days later I bought back the shares for 30c less when ATM respected the $6 support and confirmed the mid june year long primary down trend line break. Yes...I sensed this trading behaviour change back in early July...Anyone using TA and keeping an unbiased, unemotional attitude would have picked up that sense..

Part of my post (posted 26th August): "......but there is an investor dilemma happening as the crap news is still coming out yet the expected constant price fall has disappeared and replaced by price whipsawing all over the place ....There has been an animal behaviour (trading pattern) change ...This up down all over the place, failed breakouts and so forth could be seen as some sort of a market reversal sign as ATM struggles to change species between Bear and Bull..or..as investor's fear some sort of continuation event (hibernating Bear) before the Bear wakes up, regains control and the constant downward trend resumes..Time will tell. Markets are future looking."

Time has now told

Recently I have been mentioning a lot about price gaps...filling of gaps are great very short term trading opportunities as the price rises quickly to fill the previous gap down..Noting the charted price gaps areas and trade accordingly can be very rewarding. ATM filled the May gap down in the last 2 days. (see my 17th June gap chart post #21973) (https://www.sharetrader.co.nz/showthread.php?2318-ATM-A2-Milk-Corporation-Limited/page2198)

Disc: holding ATM

[JohnnyTheHorse]

Expecting a gap up open on the ASX into a good push, then hourly consolidation into the afternoon.

Played out really nice on the technicals today. I'll run through how I traded this both long and short from a day traders perspective. Then I'll run through what I'm looking at tomorrow.

The gap up open on the ASX open yesterday on large sustained volume (this is critical). If you missed the gap up open, then the first 5min consolidation was the spot for entry around 12EMA (note low volume on pullback). Stoploss would go below the 5min pullback for below the low of day.

The sell level is a loss of the 5 min uptrend (closing price) or a break below the 5min EMA12 as I didn't want to hold through hourly consolidation. Stoploss keeps moving up to each 5 min higher low. These conditions weren't triggered yesterday.

So today I know that hourly consolidation is VERY likely. I also know that momentum is very strong and there is pressure on shorts to there is very likely to be a pop on the open. I maintain the same conditions as yesterday for my sell levels. This was triggered at around AU$7.06. At this point I sell all long and go short. This short is a smaller position size as I'm going against trend (higher risk), however I know that we must see hourly consolidation. I take some profit coming into support around AU$6.90 so that I am break even if I end up getting stopped out (risk mitigation). Next profit target was 5min RSI oversold or around low of day, so covered AU$6.80. 5min RSI oversold will often signal the bottom of hourly consolidation. I went long again at this point, with stop below low of the day.

So tomorrow... I have the long position. People will look at the daily candle ad see it as a big red flag. But zoom into the hourly chart and you see that it's just hourly consolidation, so isn't a worry in the slightest. We are in fact creating a nice potential hourly bullflag and a expect we will test and probably break the high of today tomorrow. I expect another strong open. The AU$7.40-$7.50 area is then the spot to watch coming in to resistance.

13100
13101
13102

[dreamcatcher]

Appreciate your input JTH......... Banks booming and S&P 1.71% overnight increase in US will help momentum

[winner69]

Way sentiment changed and booming share price we could see 20 bucks again sometime next year

[couta1]

Way sentiment changed and booming share price we could see 20 bucks again sometime next year I just saw a group of pigs flying past my window and they promised to return next year.

[Beagle]

I just saw a group of pigs flying past my window and they promised to return next year.

:lol: :lol:
You naughty dog Winner.

[Ggcc]

I just saw a group of pigs flying past my window and they promised to return next year.
Never say never mate. I remember you
Mentioned that RYM and SUM would never have the same share price. Ps I don’t believe that $20 will arrive this time next year, but don’t know so won’t put anything forward

[dobby41]

Way sentiment changed and booming share price we could see 20 bucks again sometime next year

Well that's done it then, hasn't it! ;)

[couta1]

Never say never mate. I remember you
Mentioned that RYM and SUM would never have the same share price. Ps I don’t believe that $20 will arrive this time next year, but don’t know so won’t put anything forward Lol just had to give winner a fitting reply to his stirring post.

[dreamcatcher]

Returning daigou & $20 would upset the 42m shorts I reckon......:eek2:

[dobby41]

Why has the daigou never worked out of NZ - it is always talked about out of Australia?

[Baa_Baa]

I went long again at this point, with stop below low of the day.

So tomorrow... I have the long position. People will look at the daily candle ad see it as a big red flag. But zoom into the hourly chart and you see that it's just hourly consolidation, so isn't a worry in the slightest. We are in fact creating a nice potential hourly bullflag and a expect we will test and probably break the high of today tomorrow. I expect another strong open. The AU$7.40-$7.50 area is then the spot to watch coming in to resistance.

Thanks for sharing, always interesting to see others trade strategies. Has your stop got you out yet?

Timestamp 2:35pm NZT

[Baa_Baa]

.... deleted.

[couta1]

Returning daigou & $20 would upset the 42m shorts I reckon......:eek2: The fundamentals would need to be out of this world for it to return to $20 and we now know they were very much earthbound when it was that price previously, the tide went out and they were found naked.

[Maxtrade]

Played out really nice on the technicals today. I'll run through how I traded this both long and short from a day traders perspective. Then I'll run through what I'm looking at tomorrow.

The gap up open on the ASX open yesterday on large sustained volume (this is critical). If you missed the gap up open, then the first 5min consolidation was the spot for entry around 12EMA (note low volume on pullback). Stoploss would go below the 5min pullback for below the low of day.

The sell level is a loss of the 5 min uptrend (closing price) or a break below the 5min EMA12 as I didn't want to hold through hourly consolidation. Stoploss keeps moving up to each 5 min higher low. These conditions weren't triggered yesterday.

So today I know that hourly consolidation is VERY likely. I also know that momentum is very strong and there is pressure on shorts to there is very likely to be a pop on the open. I maintain the same conditions as yesterday for my sell levels. This was triggered at around AU$7.06. At this point I sell all long and go short. This short is a smaller position size as I'm going against trend (higher risk), however I know that we must see hourly consolidation. I take some profit coming into support around AU$6.90 so that I am break even if I end up getting stopped out (risk mitigation). Next profit target was 5min RSI oversold or around low of day, so covered AU$6.80. 5min RSI oversold will often signal the bottom of hourly consolidation. I went long again at this point, with stop below low of the day.

So tomorrow... I have the long position. People will look at the daily candle ad see it as a big red flag. But zoom into the hourly chart and you see that it's just hourly consolidation, so isn't a worry in the slightest. We are in fact creating a nice potential hourly bullflag and a expect we will test and probably break the high of today tomorrow. I expect another strong open. The AU$7.40-$7.50 area is then the spot to watch coming in to resistance.

13100
13101
13102

Bubble burst? Whats happening today. hmmm was hoping was on an upwards trajectory to be sustained. Surprising to see todays movement. Maybe it's not yet a sure thing we are in the clear yet. Was it just us hopefull's and the real movers are starting to cash out a profit already. I suppose a 15% gain up in recent days is decent enough for many. Seems to be steadily dealing again, what do you think JTH?

[dreamcatcher]

Why has the daigou never worked out of NZ - it is always talked about out of Australia?

NZ has bonded stores who arrange delivery but IF banned sending by NZ post


Q: Will people in New Zealand be able to post infant formula to their relatives overseas?

A: No. If someone buys infant formula from a supermarket and posts it from New Zealand without following the regulations for exporting dairy products then they are operating unlawfully and outside the regulated export supply chain. This has always been the case under the APA. The law has not changed.
Under New Zealand law, any infant formula that is sent to anyone in China needs an Export Certificate (also commonly called a Health Certificate). MPI issues such Export Certificates. To receive an Export Certificate from MPI, the infant formula must meet MPI requirements for export to China and the infant formula must stay with an MPI approved Risk Management Programme (RMP) holder continually from the farm up to export. If infant formula leaves the RMP chain it is no longer eligible for export and MPI cannot issue an Export Certificate.

These rules apply to all dairy materials and products.

[dobby41]

NZ has bonded stores who arrange delivery but IF banned sending by NZ post


Q: Will people in New Zealand be able to post infant formula to their relatives overseas?

A: No. If someone buys infant formula from a supermarket and posts it from New Zealand without following the regulations for exporting dairy products then they are operating unlawfully and outside the regulated export supply chain. This has always been the case under the APA. The law has not changed.
Under New Zealand law, any infant formula that is sent to anyone in China needs an Export Certificate (also commonly called a Health Certificate). MPI issues such Export Certificates. To receive an Export Certificate from MPI, the infant formula must meet MPI requirements for export to China and the infant formula must stay with an MPI approved Risk Management Programme (RMP) holder continually from the farm up to export. If infant formula leaves the RMP chain it is no longer eligible for export and MPI cannot issue an Export Certificate.

These rules apply to all dairy materials and products.

Thanks for explaining that - it has been bugging me for a while.
Cheers

[JohnnyTheHorse]

Bubble burst? Whats happening today. hmmm was hoping was on an upwards trajectory to be sustained. Surprising to see todays movement. Maybe it's not yet a sure thing we are in the clear yet. Was it just us hopefull's and the real movers are starting to cash out a profit already. I suppose a 15% gain up in recent days is decent enough for many. Seems to be steadily dealing again, what do you think JTH?

Last two days were too easy, so it's only fair today has been much harder to trade!

We set that hourly higher low in the first hours of trading (ASX), however we threw straight back (short term red flag). We are now in an hourly downtrend (short term red flag). Continuation of this rally is still the most likely scenario if the AU$6.70 level holds. If we get to AU$6.60 that'll likely be an excellent entry (gap fill).

Slow grind down (bit of a falling wedge) gives me higher confidence this is likely to bounce.

[Sideshow Bob]

NZ based research on daigou's

Daigou sales slump: Trade is down but they can still ‘make or break’ nutrition brands in China (nutraingredients-asia.com) (https://www.nutraingredients-asia.com/Article/2021/10/11/Daigou-sales-slump-Trade-is-down-but-they-can-still-make-or-break-nutrition-brands-in-China?utm_source=EditorsSpotlight&utm_medium=email&utm_campaign=2021-10-18&c=vyBYncJCWKWgzAjjDyzNbuiHs6k8YMhk&cid=DM983106&bid=1737833331#)

[X-men]

Danone also released a result in which it noted that the Daigou channel had returned to growth. These comments were in line with the recent Bubs Australia update last week.

https://www.nzherald.co.nz/business/jarden-brief-state-of-victoria-relaxes-border-crossing-rules/5XAIKT43B4KL6WJRH7HBU5ZHAU/

[Baa_Baa]

Danone also released a result in which it noted that the Daigou channel had returned to growth. These comments were in line with the recent Bubs Australia update last week.

https://www.nzherald.co.nz/business/jarden-brief-state-of-victoria-relaxes-border-crossing-rules/5XAIKT43B4KL6WJRH7HBU5ZHAU/

For those interested, this is what Danone had to say (excerpt) in their Q3 Sales press release:

"Infant Nutrition delivered moderate growth this quarter. As expected, growth was led by China which grew double digits with a broad-based contribution from all channels. Channels distributing domestic labels delivered another quarter of mid to high single-digit growth while International labels sold in crossborder e-commerce platforms kept posting steep double-digit growth. Cross-border indirect channels, which notably include Daigous and Friends & Family, were back to growth after having declined by approximately -60% in the same period last year."

[Balance]

Hmmmmm - continuing to power on.

Shorts continuing to cover?

[Lease]

Hahaha, guys said Daigou has dead, A2 is over, hahahaha

[sb9]

For those interested, this is what Danone had to say (excerpt) in their Q3 Sales press release:

"Infant Nutrition delivered moderate growth this quarter. As expected, growth was led by China which grew double digits with a broad-based contribution from all channels. Channels distributing domestic labels delivered another quarter of mid to high single-digit growth while International labels sold in crossborder e-commerce platforms kept posting steep double-digit growth. Cross-border indirect channels, which notably include Daigous and Friends & Family, were back to growth after having declined by approximately -60% in the same period last year."

Not long to go for strategic day next week on 27th. Slightly positive/upbeat commentary along lines of what Danone and Bub said, this will surge close to $10 in no time.

[Maxtrade]

Up up and away now?? Or hit a wall $7.7- $8NZD? Seems like the rally is completely disregarding the law suit, and just focusing on Bubs recent update in being hopeful Daigou will re-establish. Shorts covering, but will this run out of steam and take another dive as approaches the key $8 resistance mark?

[bull....]

A2 Milk may face second class action claim


The a2 Milk Company (https://www.afr.com/companies/manufacturing/a2-milk-no-use-crying-over-split-market-20210930-p58w3v) may face a second class action claim after Shine Lawyers launched an investigation on behalf of investors who purchased shares between August 19, 2020 and May 7, 2021.

https://www.afr.com/companies/manufacturing/a2-milk-may-face-second-class-action-claim-20211021-p591w7

[777]

A2 Milk may face second class action claim


The a2 Milk Company (https://www.afr.com/companies/manufacturing/a2-milk-no-use-crying-over-split-market-20210930-p58w3v) may face a second class action claim after Shine Lawyers launched an investigation on behalf of investors who purchased shares between August 19, 2020 and May 7, 2021.

https://www.afr.com/companies/manufacturing/a2-milk-may-face-second-class-action-claim-20211021-p591w7


From ATM

The a2 Milk Company ("the Company") is aware of media reporting concerning a
potential class action against the Company that is apparently being
investigated by Shine Lawyers. The Company is not aware of any legal
proceeding having been filed by Shine Lawyers at this time.

[bull....]

From ATM

The a2 Milk Company ("the Company") is aware of media reporting concerning a
potential class action against the Company that is apparently being
investigated by Shine Lawyers. The Company is not aware of any legal
proceeding having been filed by Shine Lawyers at this time.

if its in the afr its usually pretty reliable

[Lease]

if its in the afr its usually pretty reliable

Class action won't change ATM fundamentals. As long as its financial performance can be recovered like Danone and BUB, its SP will rise over $10.

[Balance]

Big day for ATM tomorrow.

Will the sp sink or will it rise further on the back of the strategy update? Presumably there will be an earnings update as well.

https://www.nzherald.co.nz/business/what-next-for-a2-milk-ceo-david-bortolussi-to-brief-investors/H4UP7ORDIQFOJ4DUQQKPO47RSY/

"Investors will soon discover what's next in store for a2 Milk after Covid-19 lockdowns, greater competition and a declining birth rate in China disrupted its infant formula business, causing a slump in the former high-flier's share price. A2 Milk's net profit plunged 79.1 per cent to $80.7 million in the June year due to the prolonged impact of the pandemic and a rapidly changing China infant nutrition market, prompting the company to review its growth strategy. Chief executive David Bortolussi, who has been in the job for just under a year, is set to update the market on that review on Wednesday."

DB has only been in the job since early February? You would think that the Herald & the analysts could at least get that right!

[Beagle]

No matter how you slice and dice it the macro picture looks very challenging to me and there is already a lot of expected growth baked into ATM with the company trading on 42 times FY22 earnings and 30.5 times expected FY23 earnings. These sort of metrics used to be reserved for very fast growing companies. Is ATM still a high growth company ?
https://www.marketscreener.com/quote/stock/THE-A2-MILK-COMPANY-LIMIT-11384022/financials/

[Balance]

Class action won't change ATM fundamentals. As long as its financial performance can be recovered like Danone and BUB, its SP will rise over $10.

Paying half a billion dollars in damages will change ATM's fundamentals!

[couta1]

Paying half a billion dollars in damages will change ATM's fundamentals! I highly doubt the class action will end up going anywhere unfortunately, a high bar to clear given the pandemic unless management negligence can be proven.

[peat]

dont think this article will help defend the actions.

Paywalled

https://businessdesk.co.nz/article/markets/a2-short-seller-reveals-secret-art-to-profits


Geometrica Fund manager Gary Hui could not believe the A2 Milk Company maintained its profit and revenue guidance at last November’s annual general meeting. Every single data point told one of Australia’s leading short sellers that the infant formula retailer’s forecast for revenue up to $1.9 billion in financial 2021 was too optimistic.

[whatsup]

I highly doubt the class action will end up going anywhere unfortunately, a high bar to clear given the pandemic unless management negligence can be proven.

cout, wont some of the action if successful be covered by insurance ?

[couta1]

cout, wont some of the action if successful be covered by insurance ? For sure but I haven't registered yet as its an automatic inclusion at this stage.

[Ggcc]

I highly doubt the class action will end up going anywhere unfortunately, a high bar to clear given the pandemic unless management negligence can be proven.
That is what I have been saying since the beginning. I presume at best an out of court settlement which would be in the tens of millions. Like an itchy bite for ATM in the longrun

[peat]

That is what I have been saying since the beginning. I presume at best an out of court settlement which would be in the tens of millions. Like an itchy bite for ATM in the longrun

maybe
maybe not
but dont forget the significance of the failure as regards the merits of the company and its duty to shareholders.
Its not just if they 'get away' with it. Its the failure itself and the motives behind it that should affect your view on this company.

[Balance]

Relatively low turnover today and no big price movement.

Guess there will be a big gap down or up tomorrow when the strategy reset is presented.

Stock for the brave or the foolish? :scared:

[Shareguy]

Will be interesting to see if has caught the Bubs wave or not. Will be hammered if any more bad news.

[couta1]

Relatively low turnover today and no big price movement.

Guess there will be a big gap down or up tomorrow when the strategy reset is presented.

Stock for the brave or the foolish? :scared: Any sniff of anything positive and it will be up.

[Beagle]

I don't think its possible to overstate the extent of the reputational damage done here. Regardless of whether their actions last year are successfully actionable or not its clear their systems were antiquated, their inability to read the situation was mind blowing and the speed at which they have since moved to address the situation is best described as "glacial".
I think its also readily apparent the operating environment has materially changed and there's clear headwinds to growth going forward.

They can articulate any revised plan they like but can they execute it ?

[Shareguy]

Was really good buying at $5.50. I think Will have to be real positive for serious appreciation as already priced in. We will see

[Sideshow Bob]

Not a subscriber but sure would be an interesting article

A2 short-seller reveals secret art to profits | BusinessDesk (https://businessdesk.co.nz/article/markets/a2-short-seller-reveals-secret-art-to-profits?fbclid=IwAR3A4ovDqVHQxHwOzGw5WcqiqOjrf1Ej_ _t8DZSyIYXY4wCH2SbxLwXFBz0)

[kiora]

https://www.afr.com/markets/equity-markets/a2-short-seller-reveals-secret-art-to-asx-profits-20211020-p591i6

[Ggcc]

When they have 150 pages of waffle explaining what they need to work on.

[winner69]

Page 157 (of 161) doesn't read that well

Trading update - There is no material change to the FY22 position as outlined at the FY21 August results announcement

And that was pretty vague back then

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/381594/357753.pdf

[winner69]

When they have 150 pages of waffle explaining what they need to work on.

The market movers will love it

Love this sort of stuff .... most on here will probably just shake their heads in despair and say so what

If anybody on here does go the detail a brief summary would be much appreciated .... as long as you say its good/neutral/bad

[bull....]

looked terrible the update

anz milk sales flat ( cant remember when they didnt grow ?)
US sales declined
mvm nutritional sales down
IF sales china lower than expected

looks the opposite of the bub's announcement

[winner69]

So an 'ambitious' revenue target of $2 billion some time in the 'medium term'

Jeez they did $1.73 billion not long ago

[winner69]

looked terrible the update

anz milk sales flat ( cant remember when they didnt grow ?)
US sales declined
mvm nutritional sales down
IF sales china lower than expected

looks the opposite of the bub's announcement

Could almost say this is a downgrade

[bull....]

Could almost say this is a downgrade

maybe. the stock is on very expensive fundamentals at current pricing . technically it has been trading in a range at the bottom 5.41 - 7.77. when you range trade at the bottom of a downtrend this is very bearish usually means a continuation of the prior trend. traders sold at the top of the range the other day

[Balance]

Page 157 (of 161) doesn't read that well

Trading update - There is no material change to the FY22 position as outlined at the FY21 August results announcement

And that was pretty vague back then

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/381594/357753.pdf

The crucial data & color of how things are really going investors are looking for will have to wait for the Q&A at the 11 am presentation.

Meanwhile, what do these statements really mean :

" ..... there was no material change to its position since that announcement, however it was seeing a different mix of business, favouring its English label infant formula over its Chinese label product.

Sales of English label product in the first quarter of this financial year were lower than the same period last year, but “significantly up” on the fourth quarter, when sales were constrained to reduce inventory that had built up.

While sales of English label product were expected to be down in the first half compared with the same period last year, they were expected to be ahead of expectations.

In contrast, sales of China label product in the first quarter were lower than expected, and expected to be “significantly down” in the first half.'

Observation : Sounds like daigou channel is back and sales are doing much better than expected but sales in China is down. Given that English label sales were 35% more than China label in 2021, does that mean that sales & margins are overall up?

[see weed]

Could almost say this is a downgrade
There is one positive thing I noticed on page 142. I remember suggesting it to Mr. Babidge about 6 or 7 years ago at the AGM. At long last Chocolate Milk. I am no longer a shareholder.

[Arbroath]

Observation : Sounds like daigou channel is back and sales are doing much better than expected but sales in China is down. Given that English label sales were 35% more than China label in 2021, does that mean that sales & margins are overall up?


Thats my read of it all. Very comprehensive and interesting update. Clearly there are a lot of variables they are dealing with.
I think the market will be a bit disappointed short-term and we might revisit $6.00-6.50 but medium term it feels like they are building a better business with greater insight into the variables. Essentially in transition from ride the daigou tiger to a more mature brand business. Probably be another 12 months before some clarity starts to emerge.

[bull....]

The crucial data & color of how things are really going investors are looking for will have to wait for the Q&A at the 11 am presentation.

Meanwhile, what do these statements really mean :

" ..... there was no material change to its position since that announcement, however it was seeing a different mix of business, favouring its English label infant formula over its Chinese label product.

Sales of English label product in the first quarter of this financial year were lower than the same period last year, but “significantly up” on the fourth quarter, when sales were constrained to reduce inventory that had built up.

While sales of English label product were expected to be down in the first half compared with the same period last year, they were expected to be ahead of expectations.

In contrast, sales of China label product in the first quarter were lower than expected, and expected to be “significantly down” in the first half.'

Observation : Sounds like daigou channel is back and sales are doing much better than expected but sales in China is down. Given that English label sales were 35% more than China label in 2021, does that mean that sales & margins are overall up?


margins will be lower again going forward

[Beagle]

No matter how you slice and dice it the macro picture looks very challenging to me and there is already a lot of expected growth baked into ATM with the company trading on 42 times FY22 earnings and 30.5 times expected FY23 earnings. These sort of metrics used to be reserved for very fast growing companies. Is ATM still a high growth company ?
https://www.marketscreener.com/quote/stock/THE-A2-MILK-COMPANY-LIMIT-11384022/financials/

Under my new mandate make the most of every day I am not going to wade through more than 150 pages but will simply observe the macro picture. I no longer believe this is a fast growing company that warrants the metrics this is trading on. From a TA perspective the long term downtrend is still intact. This is so far from where I see fair value its not worth my time digging further.

[see weed]

35% up on what. Does that mean English label is up a couple of million dollars and the daigou channel still down a couple of hundred mills from last year?

[Beagle]

https://www.nzherald.co.nz/business/a2-milk-targets-2-billion-in-sales-over-medium-term/GTRMT3GLFSSOIKKHIXADW7JF6Q/

Targeting $2b sales in 5 years but oh my goodness that's less than 11% per annum average top line growth over the next five years, assuming they can even meet that target, (remind me again, how "good" are ATM executives at forecasting lol) - even if achieved that's slow growth in anyone's language.

But wait there's more - Targeting margins "in the teens" in the mid term but consensus average analyst expectations are for margins over 19% by FY24 and sales over $1.7b that year. Margins used to be 30% :eek2:

I think its clear this is a downgrade and this slow growing company is a far cry from the rate of growth and margins it used to trade on years ago and the PE was just on 30 when it was growing much faster back then but on yesterday's price the FY22 forward PE is a whopping 42 !
I think a fair PE for how this company is trying to slowly grow in the years ahead is no more than 20 which suggests on FY22 average broker forecasted eps of 17 cps this company is worth a fair value of about $3.40.
Oh dear, run for the hills :eek2:

[Balance]

https://www.nzherald.co.nz/business/a2-milk-targets-2-billion-in-sales-over-medium-term/GTRMT3GLFSSOIKKHIXADW7JF6Q/

Targeting $2b sales in 5 years but oh my goodness that's less than 11% per annum average top line growth over the next five years, assuming they can even meet that target, (remind me again, how "good" are ATM executives at forecasting lol) - even if achieved that's slow growth in anyone's language.

But wait there's more - Targeting margins "in the teens" in the mid term but consensus average analyst expectations are for margins over 19% by FY24 and sales over $1.7b that year. Margins used to be 30% :eek2:

I think its clear this is a downgrade and this slow growing company is a far cry from the rate of growth and margins it used to trade on years ago and the PE was just on 30 when it was growing much faster back then but on yesterday's price the FY22 forward PE is a whopping 42 !
I think a fair PE for how this company is trying to slowly grow in the years ahead is no more than 20 which suggests on FY22 average broker forecasted eps of 17 cps this company is worth a fair value of about $3.40.
Oh dear, run for the hills :eek2:

Grim, isn't it?

[Muse]

https://www.nzherald.co.nz/business/a2-milk-targets-2-billion-in-sales-over-medium-term/GTRMT3GLFSSOIKKHIXADW7JF6Q/

Targeting $2b sales in 5 years but oh my goodness that's less than 11% per annum average top line growth over the next five years, assuming they can even meet that target, (remind me again, how "good" are ATM executives at forecasting lol) - even if achieved that's slow growth in anyone's language.

But wait there's more - Targeting margins "in the teens" in the mid term but consensus average analyst expectations are for margins over 19% by FY24 and sales over $1.7b that year. Margins used to be 30% :eek2:

I think its clear this is a downgrade and this slow growing company is a far cry from the rate of growth and margins it used to trade on years ago and the PE was just on 30 when it was growing much faster back then but on yesterday's price the FY22 forward PE is a whopping 42 !
I think a fair PE for how this company is trying to slowly grow in the years ahead is no more than 20 which suggests on FY22 average broker forecasted eps of 17 cps this company is worth a fair value of about $3.40.
Oh dear, run for the hills :eek2:

I think you got it right on, beagle. RUUUUNNN!

[Beagle]

Grim, isn't it?

Very grim ! Its a SELL

I think its crystal clear the market situation has dramatically changed and that change is permanent. First mover advantage with the marketing and pricing power than confers is long gone and never to return.
Should really be trading on very similar metrics to the slow growing Danone...FY22 PE 17.8 https://www.marketscreener.com/quote/stock/DANONE-4634/financials/

[dobby41]

Oh dear, run for the hills :eek2:

An run they are - 9% down so far.

[Maxtrade]

An run they are - 9% down so far.

Will we see previous lows tested SP $5.4 NZD, or maybe with this news on top of class actions push past to new lows? Shorts probably entered this morning with this negative update.

[Shareguy]

A new CEO so no doubt will be very conservative and under promising. Interesting that the English label is improving. Daigou channel should rebound to some degree as Australia opens up. I’m a hold on the Stock and believe that there is a good chance at these levels of some sort of take over.

[sb9]

A new CEO so no doubt will be very conservative and under promising. Interesting that the English label is improving. Daigou channel should rebound to some degree as Australia opens up. I’m a hold on the Stock and believe that there is a good chance at these levels of some sort of take over.

Well said, must say I give to CEO and the team for such a detailed presentation. Probably not great for shareholders in the short term, but this level of transparency was missing from earlier management. And good on DB to take bold step in that direction and give market more insight into company's operations and metrics.

[bull....]

Will we see previous lows tested SP $5.4 NZD, or maybe with this news on top of class actions push past to new lows? Shorts probably entered this morning with this negative update.

thats my bet

[44wishlists]

A new CEO so no doubt will be very conservative and under promising. Interesting that the English label is improving. Daigou channel should rebound to some degree as Australia opens up. I’m a hold on the Stock and believe that there is a good chance at these levels of some sort of take over.

Daigou channel is done through people traveling in and out of China. While China is still deploying the Covid zero strategy, regardless Australia opens or remains shut, Daigou is not going to work as pre-Covid

[dobby41]

Daigou channel is done through people traveling in and out of China. While China is still deploying the Covid zero strategy, regardless Australia opens or remains shut, Daigou is not going to work as pre-Covid

I thought it was done by posting it back to China rather than physical travel?

[Balance]

Well said, must say I give to CEO and the team for such a detailed presentation. Probably not great for shareholders in the short term, but this level of transparency was missing from earlier management. And good on DB to take bold step in that direction and give market more insight into company's operations and metrics.

Presentation is just that - easy to do and no doubt, would have been put together by consultants etc etc.

Market was looking for some hard data on how things are going and unlike Bubs, ATM either was unwilling or could not give a proper update on exactly how 1Q22 sales & margins have done. A really bad sign imo that the company is still in serious trouble on the MIS front.

Meanwhile, there is no compelling reason to invest in this stock - plenty of uncertainties still with what is an expensive stock at the current sp still pricing in strong growth.

[couta1]

Presentation is just that - easy to do and no doubt, would have been put together by consultants etc etc.

Market was looking for some hard data on how things are going and unlike Bubs, ATM either was unwilling or could not give a proper update on exactly how 1Q22 sales & margins have done. A really bad sign imo that the company is still in serious trouble on the MIS front.

Meanwhile, there is no compelling reason to invest in this stock - plenty of uncertainties still with what is an expensive stock at the current sp still pricing in strong growth. Someones buying all those shares up for sale today and it isn't small players.

[sb9]

Presentation is just that - easy to do and no doubt, would have been put together by consultants etc etc.

Market was looking for some hard data on how things are going and unlike Bubs, ATM either was unwilling or could not give a proper update on exactly how 1Q22 sales & margins have done. A really bad sign imo that the company is still in serious trouble on the MIS front.

Meanwhile, there is no compelling reason to invest in this stock - plenty of uncertainties still with what is an expensive stock at the current sp still pricing in strong growth.

Yeah sure, horses for courses. Depends which side equation you sit on ultimately.

[winner69]

Presentation is just that - easy to do and no doubt, would have been put together by consultants etc etc.

Market was looking for some hard data on how things are going and unlike Bubs, ATM either was unwilling or could not give a proper update on exactly how 1Q22 sales & margins have done. A really bad sign imo that the company is still in serious trouble on the MIS front.

Meanwhile, there is no compelling reason to invest in this stock - plenty of uncertainties still with what is an expensive stock at the current sp still pricing in strong growth.

No Q1 numbers mentioned when they should know by now by now

Maybe the new fan dangled IT not up to speed yet and they’ve reverted to the old spreadsheets

[Balance]

Someones buying all those shares up for sale today and it isn't small players.

Big volumes have been happening on the way up and on the way down? Nothing unusual.

[Balance]

Yeah sure, horses for courses. Depends which side equation you sit on ultimately.

So went up on the back of very good numbers from Bubs and then, Danone. I am simply making the observation that ATM has not produced any numbers and you can see the market reaction.

I was neutral waiting on the strategy reset all along but with the sp spiking higher in the last 2 weeks, thought there was a golden opportunity for ATM to update the market with good numbers.

Not only did ATM not update with good numbers, it did not disclose any numbers at all! Inexcusable !

Now I am indeed with Beagle that ATM is an uninvestable stock until sp is around $3.00 on current settings.

[sb9]

So went up on the back of very good numbers from Bubs and then, Danone. I am simply making the observation that ATM has not produced any numbers and you can see the market reaction.

I was neutral waiting on the strategy reset all along but with the do spiking higher in the last 2 weeks, thought there was a golden opportunity for ATM to update the market with good numbers.

Now I am indeed with Beagle that ATM is an uninvestable stock until sp is around $3.00 on current settings.

Each to their own, its upto each one to decide whether to invest or short if you choose to or do nothing.

[Balance]

Each to their own, its upto each one to decide whether to invest or short if you choose to or do nothing.

But of course, sb9.

This forum is here for us all to express and share news, analysis and views. As always, DYOR.

[sb9]

But of course, sb9.

This forum is here for us all to express and share news, analysis and views. As always, DYOR.

100%, I've expressed mine and so have you. Let's agree to disagree and move on.

[couta1]

Big volumes have been happening on the way up and on the way down? Nothing unusual. For sure but why would big players waste money on a stock if they thought it was going to continue to fall? For it to get anywhere near $3 the next result would need to be catastrophic which of course is a possibility but not likely, more likely a very slow grind forward from here.

[Balance]

For sure but why would big players waste money on a stock if they thought it was going to continue to fall? For it to get anywhere near $3 the next result would need to be catastrophic which of course is a possibility but not likely, more likely a very slow grind forward from here.

Beats me, couta1. I guess it is the same old story that for every buyer, there is a seller?

[bull....]

For sure but why would big players waste money on a stock if they thought it was going to continue to fall? For it to get anywhere near $3 the next result would need to be catastrophic which of course is a possibility but not likely, more likely a very slow grind forward from here.

big funds might hold it long term in one fund and short it in another different fund. all about fund mandates

[winner69]

BusinessDesk had a good piece on the ins and outs of Geometrica Fund shorted A2 from its highs

Wonder if Geometrica are still playing

https://businessdesk.co.nz/article/a2-short-seller-reveals-secret-art-to-profits
Maybe paywalled

[Lease]

A bit disappointed, frankly.

Given the size of A2($1.2b sales even after largely dropped revenue), it is understandable that it's not so easy to turn around as BUB(less than $50m revenue).

[Balance]

A bit disappointed, frankly.

Given the size of A2($1.2b sales even after largely dropped revenue), it is understandable that it's not so easy to turn around as BUB(less than $50m revenue).

Understandable but one would have thought that at least DB would do a proper update with how Q122 have gone? The opaque 'on the one hand but on the other hand' sales commentary leaves the market uninformed and that has been the story of ATM since August 2020.

[Balance]

https://www.fool.com.au/2021/10/27/a2-milk-asxa2m-share-price-on-watch-following-investor-update-2/

Copied from Beagle’s posting?

‘However, any hopes that these plans would return A2 Milk to previous levels of explosive earnings growth appear to have been dismissed by management.’

As a result, management warned that “because of these uncertainties and the range of potential outcomes, it is very difficult to define future state targets and when they will be achieved – the path is also unlikely to be linear.”

And if there’s one thing that market hates, it is uncertainty. Which goes some way to explaining why the A2 Milk share price is deep in the red today.

[bull....]

last low point was 6.11 on the 12th there about of oct so we should test there soon ..... come on boys hammertime

[Balance]

So went up on the back of very good numbers from Bubs and then, Danone. I am simply making the observation that ATM has not produced any numbers and you can see the market reaction.

I was neutral waiting on the strategy reset all along but with the sp spiking higher in the last 2 weeks, thought there was a golden opportunity for ATM to update the market with good numbers.

Not only did ATM not update with good numbers, it did not disclose any numbers at all! Inexcusable !

Now I am indeed with Beagle that ATM is an uninvestable stock until sp is around $3.00 on current settings.

Surely it cannot be that difficult for ATM to properly update the market? No wonder the sp is taking a hammering and it's just gone below A$6.00. :eek2:

Compare & contrast :

BUBS update 2 weeks ago :

Bubs Australia’s (BUB) gross revenue for the September quarter has increased 96 per cent year-on-year to $18.5 million.

Bubs’ infant formula segment saw its gross revenue increase 124 per cent and the adult goat milk powder segment’s gross revenue grew 100 per cent year-on-year.

Domestic sales contributed 23 per cent of quarterly sales and declined 13 per cent, due to a discontinued revenue stream from a business-to-business customer.

ATM today :

Sales of English label product in the first quarter of this financial year were lower than the same period last year, but “significantly up” on the fourth quarter, when sales were constrained to reduce inventory that had built up.

While sales of English label product were expected to be down in the first half compared with the same period last year, they were expected to be ahead of expectations.

In contrast, sales of China label product in the first quarter were lower than expected, and expected to be “significantly down” in the first half.'

[winner69]

Surely it cannot be that difficult for ATM to properly update the market? No wonder the sp is taking a hammering and it's just gone below A$6.00. :eek2:

Compare & contrast :

BUBS update 2 weeks ago :

Bubs Australia’s (BUB) gross revenue for the September quarter has increased 96 per cent year-on-year to $18.5 million.

Bubs’ infant formula segment saw its gross revenue increase 124 per cent and the adult goat milk powder segment’s gross revenue grew 100 per cent year-on-year.

Domestic sales contributed 23 per cent of quarterly sales and declined 13 per cent, due to a discontinued revenue stream from a business-to-business customer.

ATM today :

Sales of English label product in the first quarter of this financial year were lower than the same period last year, but “significantly up” on the fourth quarter, when sales were constrained to reduce inventory that had built up.

While sales of English label product were expected to be down in the first half compared with the same period last year, they were expected to be ahead of expectations.

In contrast, sales of China label product in the first quarter were lower than expected, and expected to be “significantly down” in the first half.'

Even Comvita gave the market some Q1 numbers …and full year guidance

Whoever advising this David guy not doing a good job …..or if David doing it all himself he has badly misread what the market was looking for.

[winner69]

Line on chart seems to be below the 50MA and the 200MA

That’s not too good

[Master98]

"Past performance is not indicative of future performance and no guarantee of future returns is implied or given."
good old days seems way behind us.

[Lease]

Understandable but one would have thought that at least DB would do a proper update with how Q122 have gone? The opaque 'on the one hand but on the other hand' sales commentary leaves the market uninformed and that has been the story of ATM since August 2020.

When you have shining performance, you will speak loud and clear. But if not, you reduce your volume so audience can't hear clearly. This is human nature!

Obviously A2 is not up to perform. Need to give them more time.

[couta1]

Even Comvita gave the market some Q1 numbers …and full year guidance

Whoever advising this David guy not doing a good job …..or if David doing it all himself he has badly misread what the market was looking for. Or perhaps he's doing it intentionally aka T/O offer still incoming?

[Beagle]

Yeap, both from a fundamental and technical perspective this looks very grim. Many years of stiff challenges ahead. Unlikely to see $10 again this decade in my opinion.

[nztx]

Yeap, both from a fundamental and technical perspective this looks very grim. Many years of stiff challenges ahead. Unlikely to see $10 again this decade in my opinion.


Geeze .. Investor Day looks like it went well .. kind of like a cup of cold tea ;)