Asos (LSE: ASC) To this FTSE 250 Stocks that have recently attracted great interest. This is because the two largest shareholders of online sellers decided to escalate their rates.

On March 17, Anders Holch Povlsen and his father, Troels Holch Povlsen, increased total interest from 27.1% to 28%.

Two days later, Frasers group He raised his shares from 24.21% to 25.1%.

Both are now close to having 30% of the company. After reaching this threshold, the city’s rules require an offer for all other actions.

A bit of mystery

The intention of both sides is unclear. However, this inevitably led to speculation that the takeover offer was not approaching.

During the week ended on March 21, this helped the group’s actions to escalate by 20.7%. This was a relief for long shareholders. From March 2020, the company’s value has fallen by 73%.

Frasers has the history of buying companies that are fighting. Whether asos meets this definition is a matter of opinion. But the Sports Direct owner has been constantly increasing his participation in the last three years, although he is not intended to hostile acquisitions.

I suspect that the Povlsen family is thinking about taking business privacy, believing that investors underestimate the true value of the group. However, looking at the recent results of the company, I do not agree.

Some numbers

Within 52 weeks completed on September 1, 2024 (FY24), Asos reported a loss after 338.7 million GBP. Despite this, the current (March 26) market capitalization is 365 million GBP.

However, the company’s latest commercial update was positive. For the first half, FY25 expects “Significant improvement“In profitability. It forecasts the corrected EBITDA (profit before interest, tax, depreciation and depreciation) about 34 million GBP.

But Asos has great interest, depreciation and accusation of impairment. In the budget year24 a total of 340 million GBP. Even if the group has a positive EBITDA, it is still a long way from paying at the level after taxation. And these costs are critical. Depreciation and depreciation are non -cash elements, but the assets they refer to will have to be replaced at some point in the future.

Uncertain perspectives

Despite the misfortunes, I think Asos goes in the right direction. Currently, it focuses more on its lower line than income.

His business model “Test & React” seems to work. This is to obtain novel products on your website within a few weeks, placing orders in tiny parts, and then the utilize of data -based forecasting to determine how much to order. It encourages “LOVING Fashion 20-SSYMERS “ (its basic market) to come back for more.

Still, I don’t see a clear way to profitability. Assuming that the price rate for profit of 10 is justified to justify its current capitalization, he would have to report profit after taxation of 36.5 million GBP. Even if the various adaptations were removed from its numbers, it would require an improvement of 160 million GBP in FY24. And this is a lot of clothes in the industry in which margins are slender.

Buying shares based on the speculation of a takeover is never a good idea.

That is why I intend to go to the gentlemen of Povlsen and Ashley in order to determine the future ownership of the ASO and interest in observing from the side.