Viceroy takes aim at Capitec

Lol I'll be getting cheap shares tomorrow. This speculation must be a pain in the ass if your caught holding the wrong company
 
saturnz said:
Muddywaters has been doing this for years, there are implications for getting it wrong, so they usually are right when releasing reports like this.
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Yip. Same with Andrew Left from Citron who took down Valeant Pharma.
 
This is from 2012:

Jean Pierre Verster, an analyst at 36One Asset Management, said Capitec was not losing market share because loan sales reported by the bank grew by 71 percent compared to 56 percent reported by the NCR for the industry as a whole.

But the fact that half of this was used to repay previous loans was an amber light flashing, he said.

“Paying off debt with borrowed money is unsustainable when interest rates eventually rise, but the impact is delayed because one would still have a good credit record and banks would even lend more to such a client because it looks like they can afford it,” he said.
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https://www.iol.co.za/business-report/economy/capitecs-earnings-jump-68-1266059

Interestingly, the guy who wrote this is now at Capitec...
Portfolio Manager at Fairtree Capital and Non-exec Director at Capitec. Tweeting in personal capacity.
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That is the crux of their whole argument. There are three possibilities:
1) Capitec are doing this in a way that is legal and economically realistic.
2) They are not, and the government hasn't bothered to look at them despite African Bank folding.
 
NarrowBandFtw said:
Even if (and at this stage that is a BIG "if") Capitec is placed under curatorship there's still no need to panic. Ask any ex-20Twenty customer, been there, done that. The worst that happened back then is your funds got frozen for a few days.


They're not doing nothing, they have a short position in Capitec shares. So if the Capitec share price falls they will make a profit i.e. they have a financial interest in wanting the Capitec share price to fall. That alone should make you wonder how objective and honest their report would be.
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Viceroy knew that any report they create would cause the share price of the target to go lower. They took a short position as per their press release, and then released a report that says nothing we don't know (I read it), but speculates the defaults are higher than reported. They have probably already exited their position because the damage is done. It will be incredibly tragic if this report causes a run on the Bank, etc.
 
Are they just following on from the Steinhoff mess??
I read somewhere that steinhoff owns PSG and it seems that PSG owns capitec :erm:
 
hj007 said:
Viceroy knew that any report they create would cause the share price of the target to go lower. They took a short position as per their press release, and then released a report that says nothing we don't know (I read it), but speculates the defaults are higher than reported. They have probably already exited their position because the damage is done. It will be incredibly tragic if this report causes a run on the Bank, etc.
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So basically,....Viceroy made their profit...who would be their next victim.
 
Can somebody explain this in Explain Like I'm 5 terms for me please?

Have savings accounts for the kids there and would like to know the implications or worst case scenario.

I really should start reading up more in regards to these things.
 
lucifir said:
Are they just following on from the Steinhoff mess??
I read somewhere that steinhoff owns PSG :
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Other way around PSG is the investment/holding company.
 
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Magnum said:
Cash
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I've got less cash lying there, but I'm leaving it where it is, not panicking.

If I was holding a lot of Capitec shares I might have panicked sooner, but the reserve bank is bound to step in if things really go pear w.r.t. clients' cash balances.

Of course this is not financial advice and I'm not a financial adviser, you have to decide what to do yourself :p
 
I think it's worth pointing out specific lines in their disclaimer:

- This report has been prepared for educational purposes only and expresses our opinions. This report and any statements made in connection with it are the authors’ opinions, which have been based upon publicly available facts, field research, information, and analysis through our due diligence process, and are not statements of fact.

- All expressions of opinion are subject to change without notice, and we do not undertake to update or supplement any reports or any of the information, analysis and opinion contained in them.

- In no event will we be liable for any direct or indirect trading losses caused by any information available on this report.

- We are not registered as an investment advisor in any jurisdiction.

- As of the publication date of this report, you should assume that the authors have a direct or indirect interest/position in all stocks and/or options, swaps, and other derivative securities related to the stock) and bonds covered herein, and therefore stand to realize monetary gains in the event that the price of either declines.

- The authors may continue transacting directly and/or indirectly in the securities of issuers covered on this report for an indefinite period and may be long, short, or neutral at any time hereafter regardless of their initial recommendation.
 
APoc184 said:
Can somebody explain this in Explain Like I'm 5 terms for me please?

Have savings accounts for the kids there and would like to know the implications or worst case scenario.

I really should start reading up more in regards to these things.
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A group of people calling themselves a research firm shorts shares from Capitec.
They release a report telling everyone what they already know about Capitec.
They make money when the share price goes down.

I am not worried about my bank account there.
 
APoc184 said:
Can somebody explain this in Explain Like I'm 5 terms for me please?

Have savings accounts for the kids there and would like to know the implications or worst case scenario.

I really should start reading up more in regards to these things.
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All deposits are guaranteed...your money is safe. If you a shareholder, share price is taking a beating.
 
Everyone is complaining that South-Africans aren't saving enough money. But every so often there's a big fraud scam and everyone involved is worried that they will lose their savings. Why should we save in the first place?

Don't save then there is no worry of losing anything.
 
APoc184 said:
Can somebody explain this in Explain Like I'm 5 terms for me please?

Have savings accounts for the kids there and would like to know the implications or worst case scenario.

I really should start reading up more in regards to these things.
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Nothing. This is speculation mostly aimed at affecting the share price of the business. They claim capitec overstated its assets and inflated its loan book, it means capitec isn't such a great business to invest in that people think it is.(actually buy their shares on the jse) but there isn't any risk to normal banking just yet. Their might be if people panic and create a bank run for no reason.
 
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