Shares in ASOS are up over 20% in the last few days, which looks exciting on paper, but new investors will be worrying they could catch a falling knife here. ASOS has coughed up 31% in the last six months and is down 14% on the year. This despite being admitted to the FTSE 250 index.
Much of the recent excitement with ASOS [LON:ASC] is being driven by rumours that the company could be the target of an acquisition bid by Danish billionaire Anders Holch Povsen. He is the company's biggest shareholder and last week raised his stake to 28%. If he reaches 30% of the stock, UK stock market rules will require that he makes a formal offer for ASOS.
However retail tycoon Mike Ashley has another 22% in the company and may not be about to let ASOS go quietly. Speculation has pushed the stock up 32% in the last five days, creating short term trading opportunities for the adventurous investor. ASOS shares are still well down on where they were even in late January when they were up at 424p.
Sadly poor old boohoo [LON:BOO] is not getting quite the same level of attention. Boohoo shares are trading at around 26p despite the end of year rally which saw them go to 40p. Liquidity also looks like it is starting to dry up and the stock is settling into a range. Boohoo does not seem to be able to cope with competition from brands like Shein and Temu and is also struggling with high levels of customer returns.
But what do the fundamentals of these companies look like, and do they represent a good long term bet?
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