Nov 28, 2017

Ocado: rout master

A screech of brakes, a flash of red, and then whack! Short sellers betting against Ocado shares were hit by a bus on Tuesday, one they always knew might bowl round the corner. After Groupe Casino said it would use the system in northern France, Ocado's share price jumped a fifth higher. Ocado will spend £15m next year to put its machinery inside, with more to follow in a two-year project to build and launch. To sketch a rough map, Ocado will be paid a fee based on the annual capacity of the warehouse, and in the past has told investors of hopes for royalties of between 2 and 5 per cent on that figure. Even if Ocado's £2bn valuation requires the bus tally to be large, just asking the question is to take it seriously as a technology company.

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