Good morning, it's Paul here!  Graham is having the day off today.

There's not much news today.


There seem to be lots of interesting things going on at the moment. Mothercare (LON:MTC) seems to be pressing ahead with its CVA & refinancing. I didn't get time to report on that yesterday.

Carluccios restaurants is apparently the next chain lining up a CVA.

I wonder how long landlords will tolerate this tidal wave of CVAs? There was an interesting tweet today from a leisure sector property fund manager, who pointed out that CVAs are meant to be a mechanism for saving struggling companies. Instead they are now being used as a property restructuring tool. It sounds as if attitudes are already beginning to harden.

CVAs are also a reward for failure. Poor old French Connection (LON:FCCN) (in which I have a long position) has had to soldier on with all its loss-making shops, continuing to occupy them & pay the rent, because it had a big cash pile (somewhat depleted now). Whereas financially weaker retailers can just threaten to go into Administration, and then negotiate a CVA instead, and walk away from all their problem shops - thus subsequently having a big competitive advantage.

Short squeeze

Yesterday was a good reminder of the dangers of short-selling. The price of Ocado (LON:OCDO) went through the roof, on an impressive contract win for its technology. These deals have been a long time coming, but they do seem to be happening now.

In what was a very crowded short trade, the squeeze (where shorters become forced buyers) was eye-watering just to observe. It's certainly made me think twice about whether I should be doing a relatively small amount of shorting at all? Although I wasn't short of OCDO, so it didn't affect me personally.

Carpetright (LON:CPR)

Share price: 36.7p (up 10.4% today, at 10:50)
No. shares: 71.3m before fundraising,  303.8m after fundraising
Market cap: £26.2m before fundraising, £111.5m after fundraising

Placing & Open Offer

The main points of this deal were already known, apart from the price, which has been set at 28p, a 15.8% discount to last night's price. This is a…

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