Yesterday’s sell-down of NCK was executed at ~$11 and underwritten by UBS, the scion’s first sell-down in 5-years. Mr Scali remains the largest shareholder with an 8% stake, and after the stock’s phenomenal run post-COVID and the risk of an interest rate-caused consumer slowdown through 2024/5, we can see the logic in taking some money off the table, especially as the stock has been trading in the current region +/- $4 range for the last few years – a forecasted 8% yield over the next 12-moths wasn’t enough to keep him fully invested. The furniture retailer delivered a strong result in August but flagged a weak start to FY24, perhaps with Christmas approaching, momentum across the business hasn’t improved.
- We can see no compelling reason to chase NCK into this sell-down.
MM is neutral toward NCK, around $11
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