Web Chart, page-158

market was pricing WEB for rapid growth with a forward PE over 20, based on FY18 EPS of 50-55c, and it was on trailing P/E of close to 40 based on FY 17 EPS 25c, but simple P/Es are hard to interpret due to recent zuji sale adding artificially to EPS for FY 17 as a one off, but especially due to recent acquisitions especially large Thomas Cook and Jac Travel acquisitions which should be eps accretive but being large acquisitions have a massive risk of failing to achieve promised synergies (think Slater & gordon at worst, Vocus and Xenith for recent and less disastrous examples that still destroyed shareholder wealth...).

I think the market has looked at the slower organic growth numbers in the trading update relating to transactions, revenue and ebitda and saw underlying organic growth <10% in a high P/E growth stock that carries the inherent risks of a M&A strategy that tends to achieve progressively diminishing returns with relatively less EPS accretion from each new acquisition as the business grows bigger and each new acquisition carries new risks.

As a result of this evolving picture and increased risks, those who have made sterling profits are seeing a plateau ahead and are choosing to lock those paper profits in before they risk losing them. Some shorters are no doubt running the numbers and seeing execution risk thus building a position. Finally, the change in sentiment due to an underwhelming result is being amplified by shorters looking to create panic selling and trigger sell orders (both Stop losses and trailing stops). Add to this, that the $10 cap raise means those who bought in here are considering selling to avoid taking losses and the gap between $8-9 looks in play to the TA traders.

All this is very interesting to watch and you can kind of see the forces at work in the SP movements.

None of this changes the fundamental business model, structure, management or outlook.

I read the report and was content as a holder that all was well and humming along. I didn't see any red flags to worry about. I think many WEB holders felt the same, and we are all a little surprised that the sentiment has turned bearish as there is nothing new or negative there of significance.

Bottom line for me is that I have a small holding in WEB (equal portfolio weight, about 4%) including a top up at $10 with the cap raise. Rather than hold and watch in pain as the price drifts lower, I sold 1/3 straight away around 10.70 to limit the losses, as i think it will find a floor around $8.50-9.00. Ill aim to buy back later if the story is on track after it bottoms then bounces then drifts back down again to re-test support.

Long-term i think we will see multiple tailwinds supporting WEB including increased global travel, increased online bookings, increased travel from emerging economies such as China with rapid wealth growth, increased industry consolidation, lower costs with synergies of size in an online business, increased purchasing and negotiating power being a global leader with billions in TTV, block chain innovation to improve efficiencies, new markets not yet entered, etc. So i will be looking to hold WEB long-term as I see massive upside long-term, but I tend to adjust my holdings up and down as sentiment changes and price swings occur because that tends to augment my overall portfolio performance longer term.

Just my thoughts and logic, hope that is helpful for others weighing their options and trying to understand the sp action.