Sports Direct (lon:spd)
Is Sports Direct Really A Public Company And Does That Matter?

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Title: Is Sports Direct Really A Public Company And Does That Matter?
Company: SPD - Sports Direct
Share Price Then: 299p
Author: Ian Smith
Date: Fri 14 Jul 2017
Comments: As a business I like Sports Direct, okay they have had some bad press but I suspect that a lot of it is related Mike Ashley being a great story and Sports Direct being in the wrong rather than them being massively far from the retail norm.

It is also to be expected that any company that has a single individual owning more that 50% of the shares is going to have differences with institutional shareholders.

As long as you know this when getting into the shares then that doesn’t have to be a problem. It is either great, the business is being run without interference or it is bad because the business lacks diversity in the decision making process.

However if the company is not paying dividends it is reasonable to worry about how much the other shareholders interests are being considered. Relying solely on share price growth for an established business in the retail sector is a brave man’s game.

Although much has been made of profit margins being squeezed by the pound/dollar exchange rate, I am not convinced that this really matters. In many towns Sports Direct are the only real option and prices going up from £12.99 to £13.99 will not make much difference.

I am following this share as there are signs of institutional investors starting to lose patience, the US acquisitions of Bobs and Eastern Mountain in early 2017 and now Game are confusing. If we do see a concerted sell off soon there may be a period of share price decline, and it is easy to see a share buy back if the price drops significantly.
Read Count: 13/15

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