Financials
The share price plummets nearly 75% after forecasts are slashed. Earlier this year, Alumbra Research had published a report highlighting numerous red flags in CABP's IPO prospectus. Most notably, they found the timing of its IPO to be highly questionable given 1) 26% of FY22 revenue and up to 51% of EBITDA would likely dissipate very soon due to changes in Nigeria’s currency policy and 2) CABP did not present a credible plan on how it was going to replace this lost revenue / EBITDA. Furthermore, CABP’s growth leading up to the IPO had benefitted significantly from volatility in other African currency corridors, which they believed was unsustainable. Other recent successful shorts from Alumbra include Alstom, Cerence and Doximity.
Edition: 172
- 27 October, 2023
Alstom (ALO FP) France
Industrials
FCF guidance cut validates Alumbra Research’s concerns - Alumbra initiated coverage on ALO on 2nd May due to €1.7bn of excess working capital liabilities from the Bombardier Transportation acquisition that they believed would represent a significant headwind to the group’s FY24 FCF. Last week, the stock crashed nearly 40% as management warned that FY24 FCF is now expected to be between -€750m and -€500m versus prior guidance for ‘significantly positive’ FCF and consensus expectations for FCF of €300m.
Edition: 171
- 13 October, 2023