Ocado surged on Thursday amid speculation it could be a takeover target for Amazon.
According to The Times, there has been talk the London-listed online supermarket is being eyed up by technology heavyweights such as Amazon. It was understood that Amazon could be looking at an 800p-a-share takeover bid, with Goldman Sachs and JP Morgan acting for the bidders.
Victoria Scholar, head of investment at Interactive Investor, said: "Ocado has fallen out of favour with investors lately, trading down 40% over the past 12 months even after today’s jump, attracting potential opportunistic interest from parties looking to pounce on its depressed share price.
"It was a stay-at-home stock market winner during the pandemic with shares surging in 2020, however the economic reopening ever since has prompted a downward trendline to emerge with many investors unwinding their holdings.
“In February its full-year losses mushroomed to $604 million, below analysts’ expectations, despite its joint venture with Marks and Spencer and its US partnership with Kroger as cost-of-living pressures on the consumer as well as elevated cost inflation and expensive energy bills take their toll.”
Great, now I’m only down 54%
Need a massive rally to get back up.
oh It will happen - i could easily see £32 per share in 7-10yrs time. Amazon coming in at £8 bid is an opportunistic move that will quadruple their return in a very short investing timeline
But would the acquisition delist Ocado?
Interesting sudden fall today. Either just someone selling a sizeable amount to just avoid the uncertainty or a shake or someone doubtful of a takeover. It will be interesting to see if it goes back up
Ocado down 9% after Amazon denies report of possible bid - am guessing whoever came up with the story made a killing
Reuters have said that it is just internet rumour that Amazon denied it and when Reuters asked Amazon to comment they declined to do so
Ocado on the rise again for the last couple of days.
Last night I was doing a bit more research to consider why amazon or another company might buy ocado. I’d imagine that Amazon could fairly quickly turn ocado into profit when integrated with their business and it fits with the wish to get into food retailing. However ocado doesn’t consider itself as a grocer/food retailer but a tech company. They have 1925 patents and significant tech.
I’d assume its great coverage for Amazon Fresh in the UK + the distribution robotics, which is supposedly world class.
There is huge potential to expand what Ocado does if it becomes part of a company such as Amazon and instantly makes it easier to grow/enter other markets and there are many ways that they could expand what Ocado does. If you combine that with the tech that Ocado then a takeover is understandable but who knows whether Amazon sees it that way. There are a few companies on my watch list that suddenly started to rise yesterday so maybe there may be news (not necessary about Ocado) after the 4th July holiday
Article about Ocado saying that there are multiple potential bidders for Ocado and arguing that breaking up the company (food delivery and tech) would create more value
Ocado has better options than a cheap sale – Breakingviews
Good time to own shares of Ocado
I have already got a small position with average price of £10 and a target price for further purchase at £3.50.
Hopefully a good chunk of the £200m will go towards reducing debt