They managed to pay top dollar for Go To just in time for the...

They managed to pay top dollar for Go To just in time for the downturn in valuations (and sales) in all of the online businesses. The way I look at it they've just been in too much of a hurry to lock in sales growth ahead of the commissioning of their new manufacturing facility which I understand is coming online this quarter.

Most manufacturers have been hard pressed during COVID simply having to deal with sales and distribution continuity (including increases in freight costs). These guys have added a couple of decent acquisitions, restructure, investment and commissioning of a new manufacturing facility and all of the associated complications in rationalising suppliers, staff and line management.

That they decided to try and do all this at once and NOT expect a dumpster fire strikes me as both incredibly brave (and naive). Nevertheless, the overall strategy seems sound and much of this was paid for by the participants in the Capital Raising.

There may well be more pain and tax loss selling into June but I think they should be able to articulate a decent vision. Their brands are good (even if I think they've commodified/trashed the Sukin brand unnecessarily through discounts), the manufacturing facility should deliver efficiencies and their structure should only get leaner from here. The lower $A shouldn't hurt either although I should look at their costs for imported ingredients.

That high level of shorts should also produce a nice slingshot if they can manage any positive news. I've taken a modest stake and I'm hoping (and expecting) for a recovery beginning with their Investor Day this week.

If I was an MD or CEO pitching a recovery I'd want any bad news out of the way. Given the relatively short time between the recent downgrade and Investor Day by the end of this week some of the shorts might be wishing they'd taken their profits already.

There's a still risks things get even worse but the balance of probabilities has shifted heavily at this point (and share price) imho. All my personal opinion only (and I almost always buy in too early).

GLTAH