Micro Focus International (MCRO)

[idpickering]

Interims; viewtopic.php?f=15&t=18444

[Wizard]

Shares off c.15% in two days after these results, didn't seem that bad to me, what did I miss?

[UncleEbenezer]

Shares off c.15% in two days after these results, didn't seem that bad to me, what did I miss?

Results firmly in line with their own guidance. I guess you (and I) may have missed some irrational market sentiment: anticipating overperformance and then overreacting when it didn't materialise.

[SentimentRules]

Was nothing irrational. Market on day chart. Double stacked gap evening star type formation July 1/4.. Plus volumes/price massively diverging with it. Vilime/time too.

Basically meant massive money was dumping into that two day rise. (Bad rise)

I know you dintt do technical but worth noting that day chart scenario. Use it to aid warning in the future.

[Spet0789]

Was nothing irrational. Market on day chart. Double stacked gap evening star type formation July 1/4.. Plus volumes/price massively diverging with it. Vilime/time too.

Basically meant massive money was dumping into that two day rise. (Bad rise)

I know you dintt do technical but worth noting that day chart scenario. Use it to aid warning in the future.

Next time, why don’t you make a prediction before the move?

Until then, I’m afraid you’re in the same pot as the homeopaths and water diviners.

[SentimentRules]

Was pretty basic. Didn't think anyone needed to be foretold that one.

But sure. I can make xone right now for you.

Find those same two days on another stock. With a company date imminent. And a week or four price rise up to it.

Can pretty much assure you already, its a short. Don't care if its Apple or Mickey mouse.

You could go deeper. Check reactions to recent competitor results etc to confirm thoughts. But probably no need.

[SentimentRules]

Anyway why do you say it was irrational? Because it didn't react as your position hoped?

So for a shorter the reaction was rational right?

Sorta throws out the irrational concept. It was rational to one side of the market. Irrational to the other.. always the case.

[SentimentRules]

Even forget the chart.

Just prior to data, there was sharp increase in short interest uk

Or if you checked Its American compatriot, the puts far outweighed the calls for July 19 expiry. (Not MFGP 1) Re post data payout call.

The list goes on fundamentally. But those two chart days basically told you the above without even looking anyway.

Was only friendly future chart advise bud but no problem. Il stick to the suggested homeopathy way in future.

[Wizard]

Even forget the chart.

Just prior to data, there was sharp increase in short interest uk

Or if you checked Its American compatriot, the puts far outweighed the calls for July 19 expiry. (Not MFGP 1) Re post data payout call.

The list goes on fundamentally. But those two chart days basically told you the above without even looking anyway.

Was only friendly future chart advise bud but no problem. Il stick to the suggested homeopathy way in future.

I guess the question is, do the charts give you an indication as to how far it will fall before it starts to stabilise?

[SentimentRules]

It gives you areas to basically assess next. For MCRO, 1725 and 1712 are massively important longterm prices. Institutional type money was at those previously. So if not supported? Low 1600's next. And pretty sharp.

Monitor volumes to assess current area. 1622 next check if no sign of buyers.

[UncleEbenezer]

Was nothing irrational. Market on day chart. Double stacked gap evening star type formation July 1/4..

And the Sun is in Uranus. According to google charts, July 1st was 2125.5p and July 4th 2160p: a massive 1.6% rise - and in a rising market.

Anyway why do you say it was irrational?

When results are in line with previous guidance, a rational market doesn't make big moves one way or t'other.

If the results had been substantially different to previous guidance then a big reaction would've been more rational.

[SentimentRules]

Your ignoring market expectation though. What was it? Must have been much higher than just in line with guidance.

Hence it's rational because market expectation not met

[SentimentRules]

I've seen stocks announce major losses and the stock flew up 20%. Simply because the market expected the loss to be worse.

[UncleEbenezer]

Your[sic] ignoring market expectation though. What was it? Must have been much higher than just in line with guidance.

Hence it's rational because market expectation not met

That's what I said. Irrational expectations followed by overreaction.

[SentimentRules]

Yes. We completely agree then. Sorry

[SentimentRules]

But the irrational expectation was private investors. Not the city.. They were shorting it hard days before. Short interest tracker and Puts in America.

Not that it matters now But, what do you think was setting the private investor expectation so high?

Was it articles or broker ratings or something?

[UncleEbenezer]

Looks like an institutional buyer: https://www.investegate.co.uk/article.a ... 206292567F

[monabri]

Sale of 650,000 shares by PDMR..a modest £11.5m

https://www.londonstockexchange.com/exc ... 48550.html

[idpickering]

Trading update and Strategic review

Micro Focus International plc ("Micro Focus" or "the Group", LSE: MCRO.L, NYSE: MFGP), the international software product group, is today providing a trading update for the 12 months ending 31 October 2019 and revising its guidance for the full year.

The Board has concluded that recent trading means that the Group does not expect to meet the constant currency revenue guidance of minus 4% to minus 6%, for the full year to 31 October 2019, compared to the 12 months ended 31 October 2018. Weak sales execution has been compounded by a deteriorating macro environment resulting in more conservatism and longer decision making cycles within our customer base. There remains a significant pipeline of business opportunity being pursued but to be within the current guidance range a highly challenging percentage of this pipeline would need to close prior to year end. As such the board considers it appropriate to revise the guidance range for the year ending 31 October 2019 to minus 6% to minus 8%.

Against this backdrop the Board has decided to accelerate a strategic review of the Group's operations. This review will focus on what in addition to execution improvements are required to optimise the value of our broad portfolio of products and it will consider a range of strategic, operational and financial alternatives available to the Company.

https://www.investegate.co.uk/micro-foc ... 00075252K/

Linked to HYP Practical. Chat here please.

Ian

[idpickering]

Somebody over on HYP Practical suggested I add these to my HYP recently. I’m glad I didn’t what with the near 30% drop in sp as I type. My sympathy to holders out there.

Ian.