Jim Armitage: The sun might yet shine on Thomas Cook
Crisis sticks to Thomas Cook like sand on suncream.
Just as it limped from the furore over its appalling treatment of the parents of two children tragically killed by carbon monoxide at one of its hotels, multiple terror attacks struck, causing unprecedented disruption.
The shares have nearly halved from a year ago to 89p, and, to top it all, today it emerged that hedge fund Silver Point Capital has taken a big short position against it.
But for all Thomas Cook’s troubles, shorting its stock seems risky ahead of the time of year when it makes all its money. It’s true terrorism has caused people to delay summer bookings, and that jet fuel prices could soon be rising, but the company’s finances are robust since it refinanced itself out of 2011’s near-collapse.
Much of the Corfu mess was laid at the door of head of legal counsel Craig Stoehr and chairman Frank Meysman. Encouragingly, Stoehr has left, along with the curious PR man John P Noble Jr. Chairman Frank Meysman clings on, but will probably be replaced in a year or so, perhaps by senior non-exec Dawn Airey. That bodes well for future crises.
More importantly, Cook still has the longer-term advantage of its deal with Fosun in China to run package tours for the burgeoning Chinese middle classes. Unless Silver Point knows something we don’t about that, this seems a strange time to bet against an already lowly share price.
