Wednesday, November 23, 2011

Thomas Cook is like Greece

Thomas Cook © fintag

News comments:
Following the plunge in Thomas Cook yesterday, it looked like these penny stocks would be worth snapping up. People always go on vacation and Thomas Cook is a big brand name with over 170 years of goodwill.

Further analysis reveals it is being run like Greece. Or a debt loving real estate fund. I mean who actually walks into a shop (1300 to choose from) and then gets someone to surf the web on their behalf to buy a holiday? Most of us are lazy but surely not that lazy. Well they employ 30,000 people so there must be a demand. Further analysis shows they operate holidays (all those lovely fixed costs) and airplanes so it looks like a case of over development.

The debts though are staggering. Nearly 1 billion GBP. And they wanted a bail out of GBP 100 million. LTV = 1 billion / 100 million.

Would be cheaper to beef up the website and employ a call centre with Skype.

Today's shorts:
USA criticises something it wish it had (bloomberg)

Today's longs:
eBay, Amazon etc take on Thomas Cook (bloomberg)

EU officials to increase their vacations to boost the flagging leisure industry.


Admin said...

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