Why is the Adore Beauty (ASX:ABY) share price having an 8% glow up today?

The Adore Beauty Group Ltd (ASX: ABY) share price is surging upwards today despite no news from the company.

It follows last week’s release of the company’s earnings for the first half of financial year.

This week, however, the online cosmetic retailer is in the headlines for a different reason today.

At the time of writing, the Adore Beauty share price is $2.22, 8.29% higher than its previous close.

That’s lower from its intraday high, though. The stock hit $2.33 earlier today, representing a 13.6% gain.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.2%. Meanwhile the All Ordinaries Index (ASX: XAO) has gained 0.3%.

Adore Beauty stock surges as company caught up in media battle

The Adore Beauty share price is stunning the market today, gaining 10% despite only silence from the company.

Though, there’s been plenty of talk of Adore Beauty on Wednesday. Not that it has much to do with the company.

Additionally, it’s more than likely none of its stock’s movements have derived from the drama.

After the market closed yesterday, the Australian Financial Review (AFR) hit back against claims by the ABC‘s Media Watch that the publication’s reporting on Adore Beauty didn’t properly criticise the company’s valuation ahead of its 2020 float.

It came after AFR columnist Joe Aston critiqued the company in an opinion piece, saying it marketed its float using “an orgy of gendered PR”.

The program followed up on the opinion piece, criticising the AFR‘s previously “glossy” coverage of the company.

“But what Aston didn’t make clear was that the AFR had been one of the noisiest promoters of the company and its founder,” Media Watch host Paul Barry said.

AFR editor-in-chief Michael Stutchbury responded to the program’s questions on the publication’s roll in promoting the company’s float, saying it did critique the company’s valuation.

Specifically, within a detailed analysis written by markets reporter and commentator Tom Richardson.

Richardson’s article was titled, ‘Adore Beauty’s valuation raises eyebrows ahead of IPO’ and discussed if the company was worth the $635.3 million its offer price put its market valuation at.

And, in another article published by the AFR yesterday evening, it claimed Media Watch failed to consider its multi-faceted coverage of the company, its founder, and its float.

It also said it repeatedly reported some experts and investors found the company’s valuation too high in the lead up to the float. Finally, it stated Media Watch didn’t consider its coverage of the surging valuations of tech stocks in general in 2020 and 2021, and warnings the sector could be a bubble set to burst.

Adore Beauty share price snapshot

Of course, it’s unlikely the headlines have caused any of the Adore Beauty share price’s movement today.

Instead, its gains might be a reaction to the tech sector’s day in the sun.

Right now, the S&P/All Technology Index (ASX: XTX) is 2.2% higher. Meanwhile, the S&P/ASX 200 Info Tech Index (ASX: XIJ) has gained 2%.

On top of that, the Adore Beauty share price suffered a 9.2% tumble yesterday and a 5.8% slump on Monday.

Thus, today’s gains could be a simple market correction.

Whatever the reason, the stock’s surge hasn’t been enough to get the cosmetic retailer back into the green.

Right now, its share price is 45% lower than it was at the start of 2022. It. has also fallen 59% since this time last year.

Finally, investors who got in on the company’s initial public offering (IPO) can despair – the company’s share price is now 67% lower than its prospectus’ offer price of $6.75.

The post Why is the Adore Beauty (ASX:ABY) share price having an 8% glow up today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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