ATM - A2 Milk Corporation Limited

[Balance]

You are probably have been long enought to understand the Sp will be depressed and doesn't show its true value ,unless you are a shorter or looking for an entry.

As a long term investor, why would you be concerned? Potentially gives those who want to invest a cheaper entry price!

But maybe what you consider to be depressed and not reflecting true value is the opposite? Companies do get overvalued in the market - eg. sky TV 2 years ago. Same could be true of ATM.

[Balance]

Daily Gross Short Sales reported for 06-Jan-2021,
ASX Limited (ASX) & Chi-X Australia (CHI-X)A2M THE A2 MILK COMPANY LIMITED FPO NZ 2,269,460 742,606,937

7 JAN A2M THE A2 MILK COMPANY LIMITED FPO NZ 1,076,582 742,606,937 .14

Based upon indicative short sales of another 1m odd more A2M shares on 7 Jan, it looks like shorters are back in force :

https://www.shortman.com.au/stock?q=A2M

Shorts will be now higher than they were before the second profit downgrade on 18 Dec!

They are either going to be very very wrong in late Feb for not locking in their gains now or are they playing big on their belief and will win even more?

[Gregnz]

All very interesting. Shorters have been badly burnt previous years. My gut feeling tells me there is as much likelihood of guidance being met as there is of missing guidance. At this point it’s a bit of a stab in the dark.

The company has certainly made it clear that a share buy back could be part of their capital management plan, that would certainly put a cat amongst the pigeons.
Any short squeeze will only have more impact on pushing the share price higher , based on a higher % shorted.

They also haven’t ruled out paying dividends, they just said it wasn’t a short term strategy as they felt they could provide a better return to investors by using funds elsewhere.
The announcement of a dividend would also be a cat amongst the pigeons scenario.

You’d certainly have to be quite gutsy to be shorting now is my opinion.

[tomm]

7 JAN A2M THE A2 MILK COMPANY LIMITED FPO NZ 1,076,582 742,606,937 .14

Based upon indicative short sales of another 1m odd more A2M shares on 7 Jan, it looks like shorters are back in force :

https://www.shortman.com.au/stock?q=A2M

Shorts will be now higher than they were before the second profit downgrade on 18 Dec!

They are either going to be very very wrong in late Feb for not locking in their gains now or are they playing big on their belief and will win even more?

The shorters are just part of the stock trading scenario's , the stock may get depressed because of them , but the insto's are the truth players, you will never known when the shorters will get burn or the insto's are just keep feeding them to make money, long term holders are blessed!

[BlackPeter]

All very interesting. Shorters have been badly burnt previous years. My gut feeling tells me there is as much likelihood of guidance being met as there is of missing guidance. At this point it’s a bit of a stab in the dark.

The company has certainly made it clear that a share buy back could be part of their capital management plan, that would certainly put a cat amongst the pigeons.
Any short squeeze will only have more impact on pushing the share price higher , based on a higher % shorted.

They also haven’t ruled out paying dividends, they just said it wasn’t a short term strategy as they felt they could provide a better return to investors by using funds elsewhere.
The announcement of a dividend would also be a cat amongst the pigeons scenario.

You’d certainly have to be quite gusty to be shorting now is my opinion.

Don't forget that the incoming CEO (David Bortolussi) will want to open the lockers and remove any remaining skeletons. It is as well in his best interest to make the next market update as pessimistic as any possible. The lower the base, the better his achievement of saving the company.

I think it is more likely the next announcement is negative rather than positive, but after that the trend has a realistic chance to change. Well, this is if David is any good ... not sure I would use Pacific Brands he run for some time as an outstanding example for a great venture or turnaround, but hey ... my (Pacific Brands) undies are o.k.

Discl: neither short nor long, but at this stage if I had to put in money I would be more likely to go short ...

[HKG2301]

All very interesting. Shorters have been badly burnt previous years. My gut feeling tells me there is as much likelihood of guidance being met as there is of missing guidance. At this point it’s a bit of a stab in the dark.

The company has certainly made it clear that a share buy back could be part of their capital management plan, that would certainly put a cat amongst the pigeons. Any short squeeze will only have more impact on pushing the share price higher, based on a higher % shorted.

They also haven’t ruled out paying dividends, they just said it wasn’t a short term strategy as they felt they could provide a better return to investors by using funds elsewhere. The announcement of a dividend would also be a cat amongst the pigeons scenario.

You’d certainly have to be quite gusty to be shorting now is my opinion.

Two very good points there: declaring a dividend (for the first time) or a share buy-back. Either of which results in real pain for short positions.

[I'm thinking TSLA here, as I reckon I lost so much shorting that b****r of a share, I could have bought myself a new one!]

I wouldn't rule out a buy-back in particular, especially if the board anticipates meeting or beating their (revised) guidance next month. It might be best use of funds at present: a conservative move in turbulent times, appreciated by the institutionals.

Which leaves us at a crossroads. Somehow, I don't see ATM languishing at these levels for long - certainly not past next month's update. With this level of shorting, volatility is now like a coiled spring. And TA's will tell you that the longer it consolidates in this $11-12 range, forming a solid base, the stronger the reaction once the spring is released. Easily back up to the $15 level (+30% say).

Of course, Balance could be right, we could see a third downgrade. But would that take the share that much lower now? Say $10-ish (-15%)?

The balance of risk seems to favour the longs, IMO.

[Ruby]

Given the debacle with Hrdlicka,it could also be argued that they got all the bad news out in 2020 to give the new guy a decent head start as they would be hammered if another new CEO brought bad tidings.
A2M's DNA has always been to under promise,over deliver until the global pandemic.

[winner69]

Given the debacle with Hrdlicka,it could also be argued that they got all the bad news out in 2020 to give the new guy a decent head start as they would be hammered if another new CEO brought bad tidings.
A2M's DNA has always been to under promise,over deliver until the global pandemic.

The ‘debacle’ with Hrdlicka was Hearn (and suppose the board agreed) firing her because she was moving too fast.

Bringing back Babidge as a ‘caretaker CEO’ was an even bigger debacle. He shouldn’t have stayed away ...he had done his job well but as a caretaker it was always going to end in tears. Boards should not make decisions on sentiment.

The damage caused because of those decisions was starting to show before Covid - it will take years (if ever) to get back on track to greatness.

I feel sorry for this guy David ... a weak Chairman and a company that’s lost it compass big time.

That’s how I see it anyway.

[Leftfield]

The ‘debacle’ with Hrdlicka was Hearn (and suppose the board agreed) firing her because she was moving too fast.

Other more likely reasons given were;

- Not shifting from Melb to HO in Sydney
- Early sale of 'performance' shares
- Hiring of too many ex work mates from Ansett etc
- Top heavy micro management
- Remaining CEO/Chair of the Melbourne Tennis org

etc etc

Bringing back Babidge as a ‘caretaker CEO’ was an even bigger debacle. He shouldn’t have stayed away ...he had done his job well but as a caretaker it was always going to end in tears. Boards should not make decisions on sentiment.

Again only in your opinion Winner. Babidge has made many good moves incl the removal of Hrdlicka. His purchase of Mataura Valley Milk is a work in progress but a good example of far sighted thinking.

The damage caused because of those decisions was starting to show before Covid - it will take years (if ever) to get back on track to greatness.

Pure speculation. What evidence have you to show this? BAU IMHO.

I feel sorry for this guy David ... a weak Chairman and a company that’s lost it compass big time.

That’s how I see it anyway.

Crikey Winner, you must be feeling a tab grumpy today. Not your usual high standard.

[xp04]

The ‘debacle’ with Hrdlicka was Hearn (and suppose the board agreed) firing her because she was moving too fast.

Bringing back Babidge as a ‘caretaker CEO’ was an even bigger debacle. He shouldn’t have stayed away ...he had done his job well but as a caretaker it was always going to end in tears. Boards should not make decisions on sentiment.

The damage caused because of those decisions was starting to show before Covid - it will take years (if ever) to get back on track to greatness.

I feel sorry for this guy David ... a weak Chairman and a company that’s lost it compass big time.

That’s how I see it anyway.

I do not think the ‘debacle’ with Hrdlicka was about her moving too fast. Rather she was 'destroying' established management model/culture while sitting on two chairs letting her 'buddy' consultants run the company and as result many long serving and dedicated people decided to leave the company. Also I do not think Hearn had a choice but to bring Babidge back otherwise company would be without CEO for sometime which is much worse. It was always clear that Babidge would be a seat warmer and not a decision maker. I have my reservations about the BOD but I agree with Ruby and don't think that they are that stupid and will let new CEO to pour another load of manure this time. Besides, it looks like DB will start somewhere around HY results announcement date and I doubt he will have time to find any remaining skeletons. It's not like I think there are any.