$ASC – ASOS stinks of a buyout, 70-1 Leverage.

Firstly, this is listed on the London Stock Exchange, its not ASC the shipping company, I'm talking about ASOS PLC.

Current Market Cap: £340m

Cash on Hand: £318m

Revenue: £2.46bn

Cash runway to 2030+ and flipping FCF positive.

They currently have over 20m active customers worldwide, primarily operating in the UK, Europe and United States. With completely automated fulfilment warehouses in Barnsley, UK.

Their recent launch of ASOS world, their app, already has over 1m UK active users.

The CEO began a 3 year revival plan in 2023 and so far the results have been as promised. A huge increase in margins, focus towards profitability, debt re-structure that gives them 5 years+ of runway and a return to profitability.

Of all the companies, across all markets, that produce over $1b+ in revenue a year its ASOS that comes out by far the best value.

Which means they're trading at a Price to sales of 0.13, almost 3 times cheaper than popular bargain names like JD.com

In fact, it's so cheap that on its current path every point in margin increase provides substantial buyback power. We're seeing exactly that, with its Adjusted EBIDTA up 60% and Margins up 45-47%

Looking at these figures one would assume a capitalist investor would want to buy this company out, which is what got me digging and leads me to believe that's exactly what will happen. With bankruptcy off the cards for a least 5 years.

I've been trading full time for 14 years now and I've seen/played a lot of buyout "rumours", thereby studying a lot of names that do actually get bought out. One of the most common occurrences prior to takeover is what we're seeing below.

Nearly 70% of the float is owned by 2 funds and the third (the Chairman of ASOS). Now Frasers group makes for a good contender but they have actually offered before (which the CEO rejected).

Owned by Danish Billionaire Anders Povlsen, who also happens to own an international fashion group inc the likes of Jack Jones and Vero Moda. A buyout of ASOS would solidify his family's empire and likely become the flagship of his fund. By merging his current portfolio and no longer competing with ASOS on fast fashion.

Frasers group is owned by billionaire Mike Ashley, who happens to own Sports Direct, House of Fraser, Flannels, Jack Wills, Game and many more. Again ASOS would be a strategic buyout here.

Soley owned by the Chairman of ASOS and a prolific buyer in recent months, inc November, December and even January this year.

It feels like these three plays are all competing to get a controlling share.

Every time Ive seen this type of top heavy share accumulation it leads to a buyout; Just like Walgreens, EA, Skechers, Metro AG and TKO holding WWE, they all saw the exact same mass accumulation of shares right before and into a premium buyout offer.

Now those are just the top 3, The other interesting option is a buyout from Asia, names like TEMU and others have attempted multiple times to get a listing on the UK stock exchange. A buyout of ASOS would give them access to European distribution, a well established brand AND listings on the London Stock Exchange.

Now I could be way off the mark here but given they have cash runway until 2030+ and given it's literally one of the most underpriced $1bn+ revenue stocks listed (on any exchange worldwide) it feels worth a punt.

Especially given how cheap the options are trading for. If you checking the open interest there's one big buyer of March £4 (400 as it's listed in pennies for UK stocks) with 1,000 OI (1m shares, options are multiples of 1,000 in the UK). With basically no other OI which is extremely odd.. Now just like unusual whales points out, somebody always knows and given the recent 25% straight bounce, increase in volume and this recent block buy of calls it stinks of a buyout.

Based on current options price, if that were to happen by March, the options payout is insane. With the equivalent leverage between 50 and 100/1

Take a look into it and see what you think, I plan on buying some more calls and shares (Incase it doesn't happen as soon as I feel).