Will there ever be an end to the boohoo (LSE: BOO) share price slide? Well, Thursday 22 June was AGM day, and it seems like a good time to take a fresh look.
The boohoo board has been critical of management at Revolution Beauty. And boohoo, which owns 26.6% of Revolution, wants to replace the chairman, CEO and CFO with picks of its own.
The board seems set to vote against the reappointment of Revolution’s executives at its AGM later in June. Revolution, meanwhile, wants to postpone the meeting to head off what it sees as boohoo’s “hostile shareholder actions.“
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Frasers Group
In other news, Mike Ashley’s Frasers Group has taken a 5% stake in boohoo, to add to its retail acquisitions. The group has snapped up 9% of Currys too, and has a history of buying underperforming retailers.
Is Frasers’ interest in boohoo a good thing? Well, if Ashley and his team see boohoo shares as a buy right now, maybe we should too?
He’s not someone with a short-term view, mind. So I don’t think anyone following him and buying boohoo shares today should expect a quick turnaround.
Share price crunch
The boohoo share price started 2023 well. But its gains of the first few months have already been lost. And over the past five years, we’re now looking at a hefty 83% fall. I’m glad I didn’t buy any a few years ago. Oh, hang on, I did.
A distraction
What does all this business about who’s buying what, and who wants to oust whom, mean for boohoo shareholders?
I’d say it’s a distraction at best. What boohoo surely needs now is a focus on efficiency, and an achievable plan to get back to profitability.
It’s been saying it has that in place for ages now. But investors can be a cynical lot. And many of us will steer clear until we see real evidence of bottom-line progress.
Here’s what counts
We need actual results, and on this front, the last full year turned out better than expected.
Sales grew by 43%. And perhaps more importantly, boohoo increased its market share. That seems more important than ever now that boohoo’s early mover advantage is long gone.
Along with ASOS, boohoo was one of the first to launch on the worldwide online fashion scene in such a big way. But so much has gone wrong since, not all of it of the firm’s own making, that I’m once again reminded of the wise words of Warren Buffett.
The billionaire investor has pointed out many times that the first movers in a new market are rarely the ones that make the big profits.
What next?
Should I add to my boohoo holding now the shares are even cheaper? I find it tempting, and once again I think I might be looking at a buying opportunity.
But I might end up throwing even more cash at what’s turned out to be a money pit for me. So I’ll hold back and keep watching. At least until the current board battles and share ownership changes settle down.
