Hedge funds are cashing in on the crisis at Thomas Cook Group (TCG). As the 178-year-old travel agent battled for survival, data showed that its shares were the most bet-against in the UK. About 10.7% of its shares were being ‘shorted’ yesterday, with the positions taken by hedge funds thought to be worth at least £5.7million. But the paper profit some have made over the past six months is likely to be far higher, as Thomas Cook’s share price crashed 89% over the period. Among the vultures betting against the stricken firm is Whitebox Advisors, which was one of a handful of funds that made a killing by betting against the US sub-prime mortgage market in the run-up to the financial crisis.
A row has erupted between two former friends over the Ocado Group (OCDO) delivery business, threatening to embroil some of retail’s biggest names. The legal spat – which centres on the historic tie-up between Marks & Spencer Group (MKS) and Ocado – shines a spotlight on the battle for control of Britain’s grocery delivery market, with accusations of industrial espionage, top secret meetings and ‘bullying’ business tactics. At the heart of the clash stands Jonathan Faiman, one of three former Goldman Sachs bankers who launched Ocado 20 years ago, and Tim Steiner, also one of the trio and chief executive of the £9 billion delivery business. Faiman, who invited Steiner to be best man at his wedding, left Ocado in 2010. He approached Marks & Spencer in June last year to pitch a new online grocery plan through his fledgling Today Development Partners venture. The idea, if it came to fruition, would put him in direct competition with his old friend. The high street stalwart was one of the few major food retailers with no online shop. Faiman offered a solution to compete with its fierce rival Waitrose, then Ocado’s partner.
Thomas Cook Group (TCG) bosses have been paid more than £20 million in the past five years even though they have led the tour operator to the brink of collapse. Swiss chief executive Peter Fankhauser alone has taken home more than £8 million since being handed the reins at the beleaguered travel group in 2014. The total awarded to the top brass is equivalent to more than a quarter of the company’s current £69 million value. The figures provoked anger last night as holidaymakers, staff and small shareholders faced increasing uncertainty.
The tycoon who founded Hargreaves Lansdown (HL.) has slammed the fund supermarket over its handling of the Neil Woodford crisis. It has since emerged that HL – the UK’s biggest fund supermarket for private investors – had been harbouring concerns about Woodford since November 2017 but had continued to feature him on a ‘best buy’ list regardless. Peter Hargreaves, who stood down from the board in 2015, said bosses leading the business he started with Stephen Lansdown had been too slow to act and he was ‘annoyed’ they had let the fiasco ‘go on so long’. He also criticised HL for having ‘too much’ invested with Woodford and blasted the manager for not being ‘truthful’ about his funds.
MIDAS SHARE TIPS: Listen up… Glastonbury sound specialist’s shares are set to kick up a Stormzy! Midas verdict: Midwich Group (MIDW) is a focused and well managed business in a growing industry. The business has also increased revenues every year since 2006, even during the financial crisis. At £5.26 the stock is a buy.
Midas verdict: Sigma Capital Group (SGM) can seem rather complex but the fundamental principles behind the business are simple. Britain needs more houses and increasing numbers of people, including families, are turning to the rental market. They deserve decent homes – and Sigma intends to deliver them. Shareholders who bought in 2015 have done well but, at £1.02, they should hold on to their shares. New investors could also take a punt on this stock.
