MFB - My Food Bag

[winner (n)]

Good grief ....close today at 63 cents


Seems Tony didn't step up and buy some to support the share price.

Following Metro Glass trend still.

[Basil]

I felt from the beginning that MYB was overhyped and overvalued at IPO - $1.85?! and a market cap of $450m?! - more than many established business's. Analysts, commentators, ratings agencies did a great disservice to NZ investors for so eagerly promoting such a fragile business with a questionable business model and metrics. Ditto the NZX - it shows how desperate they are for new listings.
MYB could easily go under or end up a 10c-20c stock in a couple or years. Glad I steered clear and I would be bailing now and taking the hit if I was a holder. It's only going to get worse from here.

Posted 15 August.  Well called Sir, I think you could be right.

NTA -7.42 cents.  Reminds me of the Evolve float where they had negative NTA that tore up the vast majority of IPO investors money.  MPG now less than one eighth of the IPO price, I think Evolve was slightly worse before the share consolidation.

Shares ending up trading at less than one eighth of their IPO price is certainly not without precedent on the NZX so as Winner suggests this could easily "do a MPG"

[Hectorplains]

Posted 15 August.  Well called Sir, I think you could be right.

NTA -7.42 cents.  Reminds me of the Evolve float where they had negative NTA that tore up the vast majority of IPO investors money.  MPG now less than one eighth of the IPO price, I think Evolve was slightly worse before the share consolidation.

Shares ending up trading at less than one eighth of their IPO price is certainly not without precedent on the NZX so as Winner suggests this could easily "do a MPG"

The amount of goodwill they're carry on their books is out the gate. 

[Arbroath]

Heading under 50c once they downgrade and have to write-off goodwill next year, or whenever the Board acknowledge reality.

[winner (n)]

Wow - MFB share price in the 50's

Chair Tony got a few minutes to step in and get it back into the 60's

Wouldn't want a weekly close in the 50s - not a good look at all

[Basil]

I wouldn't hold your breath waiting for Tony Carter to save the day by investing his own money here. 
$140,000 for attending all 14 board meetings.  $10,000 a meeting.  Nice work if you can get it.

[winner (n)]

I wouldn't hold your breath waiting for Tony Carter to save the day by investing his own money here. 
$140,000 for attending all 14 board meetings.  $10,000 a meeting.  Nice work if you can get it.

He's got 120,000 odd

Been averaging down since IPO - bought at $1.71 / $1.63 / $1.36 / $1.32 and $1.24

[Auto Rower]

Wow - MFB share price in the 50's

Chair Tony got a few minutes to step in and get it back into the 60's

Wouldn't want a weekly close in the 50s - not a good look at all

Wow there must be something else behind this total batting collapse of a company with a good eps not to mention divi cannot all be covid tailwinds I suppose we will no soon enough

[Basil]

Speed of the decline appears to be increasing and risks breaking down the fairly steady rate of constant decline into something worse.  There would appear to be a real risk of this being below 50 cents before Christmas.  Sales comparatives cannot be helped by the fact that this time last year we were into a whopping 107 day Auckland region wide lockdown.  I would think Aug 2022 sales compared to the same month last year probably make for sober reading and its likely Sept, October and November will be much the same.   Maybe the same punters that thought it was a bargain at $1 will step in and give some support at 50 cents ?

[winner (n)]

Shouldn't have started the chart comparing the Metro Glass and My Food Bag share price trends from date of IPO

Better call the man in the white coat to save me from this morbid fascination

The last couple of weeks MFB has done it best to mimic Metro (both had a bad weeks but Metro has managed to avoid going below 20 cents)

Won't stop me now - fascinating how market behaviour / sentiment goes

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[KW]

Speed of the decline appears to be increasing and risks breaking down the fairly steady rate of constant decline into something worse.  There would appear to be a real risk of this being below 50 cents before Christmas.  Sales comparatives cannot be helped by the fact that this time last year we were into a whopping 107 day Auckland region wide lockdown.  I would think Aug 2022 sales compared to the same month last year probably make for sober reading and its likely Sept, October and November will be much the same.  Maybe the same punters that thought it was a bargain at $1 will step in and give some support at 50 cents ?

Its moving into being priced for a recession, and reduction of consumer discretionary spending which should hit companies like MFB as people tighten their wallets.  Although, I personally find pre-prepared meals reasonably economical as there is no food waste - I got sick of throwing out food that had gone off before I had a chance to get around to cooking it.  And the meals are certainly cheaper and healthier than buying takeaway. 
For something in their favour, as Covid dissipates and people return to working in the office and commuting rather than working from home, they become time poor once more so MFB might actually pick up customers.  As mentioned previously, I think that this half year should be a good indication of their longer term prospects, so plenty of time to sit on your hands and watch.  Don't buy the downtrend. 

[winner (n)]

Chair Carter has 154,045 shares - cost him $245k - average $1.59

So current price of $0.59 he's about $154k under water (less divie he got)

Last time he 'supported' the share price was last November when he bout 20,000 share at $1.24

Probably thought jeez no future in buying anymore

Who says insiders buying is a good sign - many punters think / live by that

[winner (n)]

Chair Carter under water with his MFB shares

Chair Coutts under water with her OCA shares

Insiders buying always a good sign .... but beware of Chairs buying

[Basil]

Make sure the men in white coats keep their appointment with you nice and short Winner because I need them over here.  Morbid fascination with train wrecks is something I am drawn too as well.  Usually at least one very valuable lesson to be learned, often several.
I believe following insiders is for people who can't do their own proper fundamental and technical analysis. 

You could be right KW that this half is some sort of leading indicator of their sustainable performance going ahead but I suspect the full effect of mortgage rates increasing is still to be felt and it won't be until early - mid 2023 that almost everyone who formerly had an ultra low mortgage rate has had it refixed and get their new and very brutal reality check.    Not just that but people might be inclined to bridge their cashflow shortfall with credit cards for a while so reality might not bite really hard until late next year.  Further, I think it takes most people quite a while to change their habits and cancel memberships, programs and other expenses that are not necessities.  From what I have seen in my career most people have a serious aversion to making savings and bringing new efficiencies within their finances. Its an emotional thing, its not a feel good experience, people feel bad about themselves having to do it and therefore a lot of people procrastinate and "do an ostrich" for as long as they can. 

You strike me as a good pragmatic, proactive, logical thinker and so am I, (so if we could see a financial challenge coming we'd take proactive steps to mitigate the effects), but a lot of people simply run their household finances around what makes them feel good and its more emotion or healthy living based than anything else and a lot will only make changes to habits if they are absolutely forced too, (reactive).  2024 could be the year we see how sticky customers really are.  More than happy to let the downtrend play itself out. 🍻

[winner (n)]

Basil - studying train wrecks and learning is a good practice.

I enjoyed this piece from Babette at Mindsets titled 'The Subject of Stupidity' - business related but cold apply to 'investing' as well .....and the last thought is very telling in saying 'Should stupidity be topic of study in business'

The Study of Stupidity

Being stupid is one of the main characteristics that distinguish humans from animals. Animals have an instinct for their own best interests. Humans, by contrast, occasionally act in a way that is contrary to rational behaviour - and contrary to their own best interests.

Much attention is paid to 'best practice' in business courses, but perhaps we need to pay more attention to stupidity.

A definition of stupidology is 'doing the same thing again and again, and expecting a different result, as in the example of repeating the same types of campaigns, strategies, etc., and getting only limited results - yet somehow expecting to do better next time.

Organizations (governmental and commercial) get locked into doing the same thing - instead of standing back and asking whether a particular policy is effective. The tendency is to repeat it with more gusto. Perhaps too many careers are vested in the original policy to question it. Instead of lateral thinking, people and organizations just dig themselves deeper into the same hole.

Here are three recommendations to break the cycle:

Educational institutions should teach worst practices. Those that currently teach 'best practice' courses in the hope that students can discover a. formula for success, would perhaps also gain from looking at 'worst practice'. What are the lessons to be learned from the failures?

There should be a study of 'bad role models'. People are often encouraged to follow positive role models, but what about the worst examples they have encountered? They need to reflect on why they thought the bad role models were so bad and how they ought also to avoid behaving as badly.

Within each company, there should be the recognition that mistakes are an opportunity to learn, rather than burying them. There should be a culture where mistakes can be admitted and explored, and lessons learned before moving on.

After every project, a company should sit back and ask: "What were the lessons to be learned? What did we do right and what did we do wrong?" Consider how 'open' your culture is and whether it enables staff to admit that mistakes have been made.

Adapted from: "Stupidology - The study of stupidity" by Keith Suter, Leadership Excellence Magazine, April 2007. https://www.keithsuter.com.au

This article resonated with me back in 2007 and still stands today. What do you think? Should this be a topic of study in business?

Link to article
https://www.linkedin.com/pulse/study-stupidity-babette-bensoussan-mba