Good morning!

The Fed did raise rates yesterday, provoking another 350 points to get shaved off the Dow Jones Index.

The FTSE isn't thrilled about the news either, and is down by another 0.5% this morning.

It's a horrible end to the year, at least for those who are nearing the end of their investment time horizon.

I most definitely have my buying boots on, and am working my way through the watchlist to see which other shares I should prioritise for a purchase early in the new year.

These conditions are painful for many investors, there is no doubt about that. It's unnerving to see so many shares collapsing in price - but you always to have to look at the specifics of each case. Has there been an underlying loss of value - and is it permanent or temporary? Or has there been no underlying loss of value, and the share price is merely reacting to the general mood of the market?

We have examples to look at today:




Yu (LON:YU.)

  • Share price: 61p (-22%)
  • No. of shares: 16 million
  • Market cap: £10 million

Findings from the Accounting Review

I didn't expect to be back covering this again so soon, but here we are.

In summary, things are worse than expected: profitability is reduced by an additional £2.75 - £3.25 million, on top of the £10 million reduction previously announced.

The adjusted loss for the current year will therefore be in the region of £7.35 - £7.85 million.

The only thing the company has in its favour is a reported cash balance of £11 million as of 30 November 2018. So the market cap has fallen to just below this level.

I would note that the actual loss could wind up being much higher than the adjusted figure shown above.

The Adjusted Loss Before Tax excludes charges for Share Based Payments, gains or losses on derivatives contracts, and, for Financial Year 2018, exceptional restructuring costs, provisions made on first adoption of IFRS 9, and the costs of the Review.  It is also is based on a working assumption that the corrections will not result in a restatement of prior…

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