Future of tesco, morrisons

jimjames

planteria wrote: »

yes, further drops this morning...
http://www.bbc.co.uk/news/business-29306444

Overstating of profits by £250m.

Can things get worse or is this the buying point?

bowlhead99

jimjames wrote: »

Overstating of profits by £250m.

Can things get worse

Well, when they complete the investigation they may find that the estimated profits was actually overstated by £251m

Doshwaster

jimjames wrote: »

Overstating of profits by £250m.

Can things get worse or is this the buying point?

I was tempted to buy this morning. Decided not too though.

I see several senior managers have been suspended while an investigation is done. However these accounts must have been signed off by their auditor so there could be blame there too.

bowlhead99

There could be, but the auditor not spotting that your assets/incomes were a bit overstated (a percent or two of assets) and you didn't have the £250m, doesn't mean that the auditor is going to give you £250m out of his own pocket to make you feel better.

Just another dent to market credibility that they could really do without right now. I still think they are well placed compared to some of their rivals (eg MRW) if they can deliver on their strategies. Although sometimes I've been very surprised how easy a couple of their bigger stores were to get around in the last few months, a lot fewer people than I'd expected for the time of day/week. Great as a customer, not so great as an investor!

jimjames

bowlhead99 wrote: »

Just another dent to market credibility that they could really do without right now. I still think they are well placed compared to some of their rivals (eg MRW) if they can deliver on their strategies. Although sometimes I've been very surprised how easy a couple of their bigger stores were to get around in the last few months, a lot fewer people than I'd expected for the time of day/week. Great as a customer, not so great as an investor!

Having visited Aldi for the first time yesterday I was surprised how busy it was and how cheap some items were. Other items were almost the same as Tesco, although I guess 10p more on a 70p item is still nearly 15% more expensive.

lalman

I hope Tesco's either turn around or get bought out...

I am lucky I don't think ill need the money I invested for a long time... hopefully it will turnaround by then!

Its like a rudderless supertanker that has rust... and more they investigate the more rust they are finding...

2010

Too big to be bought out plus competition rules may not allow it.
Must be reaching fair value at sub 200p.

Don`t try and catch a falling knife, it`ll be a long time fixing this mess.

210p as I post.

Scarpacci

This is deeply disappointing. Even though I haven't bailed out so far, believing Tesco are still attractive as a company and now a turnaround play, financial irregularities are about the biggest warning sign to jump ship I can think of. Had you asked me yesterday about a share with worries over the books, I would have said sell, even at a loss, at the first sign of anything untoward.

I was, until now at least, planning on buying more once the interims were announced. I fully expect the results to continue be bad and the share price to drop further then, but that by then we've probably reached the time of maximum pessimism.

This puts back the date at which Tesco could considered investable further back, and not just because of the delayed interims. I'm sure everybody has a different opinion on when/if Tesco might be investable again, some thinking it will be years, but I can see only reasons to wait it out longer today. There's not just the cloud of even worse interims hanging over them, there's the question of these four suspended managers.

antrobus

bowlhead99 wrote: »

There could be, but the auditor not spotting....

Interim accounts are unaudited.

Not that it's all that difficult to get something past an auditor, if you know what you're doing.:)

antrobus

2010 wrote: »

Too big to be bought out plus competition rules may not allow it......

Competition rules would apply to a player with existing UK market share. They would not apply to a foreign buyer. Is there some big Chinese retail operation out there with a few billion in the bank?