Toon boss gambles away £129million on stock market
ASHLEY'S A LOSER
BILLIONAIRE Newcastle owner Mike Ashley has lost an astonishing £129million gambling on financial markets in the City.
And that could spark fears Ashley, who bought the club last May, is on the brink of selling out at St James' Park.
The tycoon (right) suffered the amazing losses after a series of poor bets on the value of crisis-hit Halifax Bank of Scotland stock.
The mind-boggling losses were revealed after HBOS was at the centre of false rumours it was about to collapse and millions of pounds were wiped off its share price on Wednesday.
Ashley, 44, has always pledged his long-term commitment to Newcastle but now Toon insiders believe he is weighing up a deal to sell.
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Newcastle fans will be stunned to hear about Ashley's giant loss. While it hardly leaves him on skid row, it won't help Newcastle's morale as they battle to haul themselves clear of the relegation zone.
Despite Saturday's 2-0 win over Fulham in which Mark Viduka was on target, the club are still at the wrong end of the table.
Gambled
A City insider explained: "Mike should have got out a long time ago when the extent of mortgage debt in America was made clear last year.
"It has effected all the markets and HBOS is just one of them.
"When the stock was priced at £8.80, he gambled £300,000 a point for each penny rise or fall. If the price rose a penny he would get £300,000 but if it fell he would lose that amount."
Ashley gambled on IG Index, a spread betting firm in the financial sector. The firm do not buy or sell shares, just take bets on whether the market is going to go up or down. And in Ashley's case his wagers have been nothing short of catastrophic.
His win and loss accounts make nightmare reading. After the dramatic crash this week HBOS was at one point trading at £3.98 before making a recovery.
But the shares had still lost nearly 50 per cent of their value since Ashley started gambling on their value going up in October. Despite a couple of £10m-plus wins in November last year he ended with a net loss of over £10m after the first month's trading.
Blowing
Between November and December 1 he lost about £14m and between December and January £20m.
Ashley nearly steadied the ship between January and February, cutting his losses to £39m, but then he lost another £29m.
After Wednesday's freefall of HBOS shares — 17 per cent (or £3billion) was wiped off their value in just 15 minutes — Ashley's total losses, including this month's trading so far, add up to a mind-blowing £129m.
He should have hedged his bets, so that should the stock prices drop, he would still be ahead. He was either not thinking or got too greedy.
Posted by: Cecil Archer | March 23, 2008 at 02:48 AM | Report this comment
with a brain like that how did he become rich in the first place?
Posted by: lee | March 23, 2008 at 07:03 AM | Report this comment
like most people new to spreadbetting for the first time
he just jumped in,no plan.
plan your trade and trade your plan,with a billion
his maximum trade should only be 1 to 2%,ie 10 to 20 million,with a stop loss.
Posted by: david collis | March 23, 2008 at 08:32 AM | Report this comment
IG Index IS hedging. You can´t hedge against hedging. That´s like betting against yourself. You might as well stay out of the market altogether and save the commission fees. And come to mention it ........
Posted by: Nigel Gibbins | March 23, 2008 at 09:40 AM | Report this comment
Just proves what I've always known. Just because you're a success in one business field doesn't mean you can translate that into another.
Stick to selling chavvy sportsgear Mike and you'll be ok.
Posted by: Alex | March 23, 2008 at 09:48 AM | Report this comment
The Newcastle ship is very quickly sinking, Even if they do avoid relegation this year, what about next? Keegan will spend Millions and still will probably be in the same position. Keegan is not the manager he was 10 years ago and with a chairman who throws horrific ammounts of money around and loses it. Newcastle have alot to be worried about.
Posted by: Tony Harrington | March 23, 2008 at 10:44 AM | Report this comment
I feel there is an awful lot of wishful thinking in the previous comments, If Ahley did decide to sell up Newcastle United would survive and carry on as a club they will never die,
However i must add the Ashley did not appear to be too concerned yesterday when he was having a drink with the fans in the "Three Bulls" prior to kick off, and Keegan will not waste any miilions like Big Sam, and others next season, he will spend wisely and make Newcastle United a wonderfil team again ,
Posted by: J Barrett | March 23, 2008 at 12:01 PM | Report this comment
Just think about the back four he could have bought with that money???
Posted by: Graham | March 23, 2008 at 06:44 PM | Report this comment
Easy comes easy goes,thats all about gamling,as they say tomorow is another day,he might get it all back,or loose it all again,thats the name of the game,no further comments.
Posted by: DanielSalaman | March 23, 2008 at 10:06 PM | Report this comment
this is a very rich individual, i suppose he does not not even know his worth, 129 million is such a drop in the ocean, he will gamble it back at some stage anyway!!
Posted by: ron mukasa | March 23, 2008 at 11:31 PM | Report this comment
He can afford to lose it anyway god knows how he became a billionaire though if he can be that stuoid with that amount of money.
Posted by: dodge | March 23, 2008 at 11:34 PM | Report this comment
So you wanna a quick fix, eh? Not there, not there. It is in football! Until you win, let me help u without any fee.
No obligation.
Posted by: August | March 25, 2008 at 04:46 PM | Report this comment
Hopefully with a bit of luck,Mike will sell Newcastle to cover up the losses and will bring another disaster to the North East lol. NEWCASTLE TO BE RELEGATED!!!!!!!!!!!!!!!
YNWA
Posted by: Daniel | March 25, 2008 at 09:08 PM | Report this comment
How can people sit on their computer and criticise the bloke for this when he made himself a Billionaire from nothing!! Simply astounding how stupid this whole thing is.
Posted by: Jay | March 26, 2008 at 05:43 PM | Report this comment
why is people thinking he will sell the culb he is a billionaire he will make money and lose money thats wot billionaires do
Posted by: michael liddle | March 27, 2008 at 11:35 AM | Report this comment
Stock market is a volatile market. Where people invest with the intention of making money but many traders and investors end’s up as a looser. Must be wondering what makes one trader a winner in the stock market and another one as a looser in the market.
Apart from this result season is also going on. Though not that favorable results are expected this time. But INFOSYS came up with very good results now we need to wait till giants like RELIANCE, SBI and other declares there numbers. As they will be responsible for further market movement.
For now we strongly suggest everyone not to take too many deliveries in there portfolio. Just wait for some more time for quality value buying.
In Indian stock market many people have many doubts but they don’t want to clear them by consulting professionals nor they want to raise there questions where other traders and investors can help them out. But now many portals are coming up with QNA sections where investors and traders can exchange there views about stock and stock market. Indeed it’s a great help for everyone who are related to stock market.
Regards
SHARETIPSINFO TEAM
Posted by: sharetipsinfo | January 20, 2009 at 06:48 AM | Report this comment