Month: May 2022

The Aussie Broadband Ltd (ASX: ABB) share price soared during early morning trade before making a quick reversal.

This came after the broadband company provided a further announcement to the market regarding its third quarter trading update. 

At one point, Aussie Broadband shares rose as high as $4.60. But since then, investors have driven the price down to $4.17, up 4.25%.

What did Aussie Broadband announce?

In a statement to the ASX, Aussie Broadband advised that the trading update figures excluded the ‘Over the Wire’ (OTW) business.

The company welcomed the OTW team after completing the acquisition on 15 March 2022.

However, the accounts are still being finalised.

Aussie Broadband purchased 100% of the shareholding in OTW for an implied value of $5.75 apiece. This was either comprised of a $5.75 cash offer, 1.150 ABB shares, or a combination of both.

The total consideration of the deal stood at $344 million with an implied enterprise value of $390.4 million.

Aussie Broadband stated that it remains confident that both two companies will be earnings per share (EPS) accretive on a proforma statutory FY21 basis.

Management is targeting annual cost synergies of between $8 to $12 million within the next three years.

Although with the integration of the two companies already commenced, early synergy wins have so far been achieved.

Aussie Broadband noted that it moved a significant portion of its voice traffic onto the OTW tier 1 voice network. This resulted in roughly “$3 million of annualised EBITDA synergies being actioned.”

Once the accounts are completed, OTW is expected to deliver around $11 million in EBITDA (before transaction costs) for the 3.5 months owned under the Aussie Broadband banner.

When including the contribution from OTW, the company is forecasting full year EBITDA (before transaction costs) to be in the range of $38 million to $39 million.

Aussie Broadband share price snapshot

After falling 28% yesterday, the Aussie Broadband share price has made a remarkable turnaround.

Over the past 12 months, the company’s shares have risen by more than 32%, but year to date is down 15%.

Aussie Broadband has a price-to-earnings (P/E) ratio of 52.08 and commands a market capitalisation of roughly $1.32 billion.

The post Aussie Broadband share price stages partial recovery on ‘further market update’ appeared first on The Motley Fool Australia.

More reading

• Why Appen, Aussie Broadband, IGO, and Kogan shares are sinking today
• Here’s why the Aussie Broadband share price is crashing 25% today
• Best ASX shares to buy in May 2022
• 3 ASX All Ordinaries shares rocking all-time highs today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/oThVBcm

Looking at the S&P/ASX 200 Index (ASX: XJO) shares the professionals are buying and selling during these volatile times have yielded a few surprises.

Local fund managers have been shying away from ASX banks ahead of the RBA’s interest rate decision today.

That’s the finding reported in JP Morgan’s Fund Manager Radar report, which noted a 63-basis point (bp) decline in bank holdings among domestic institutions.

ASX 200 shares facing a bank run

That decline is the largest among this cohort since the March quarter of 2020. It was two ASX big bank shares in particular that were being dumped.

These were the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price and Westpac Banking Corp (ASX: WBC) share price. Holdings of ANZ Bank shares among local fundies plunged 111 bps while Westpac tumbled 160 bps.

One ASX bank bucking the trend

But Australian fundies weren’t shunning all ASX 200 bank shares. In fact, there the National Australia Bank Ltd. (ASX: NAB) share price seemed to have found favour with the group.

“Over the past year, WBC has seen the largest scaling back by domestic instos (-320bp), with NAB being the only gainer (+40bp),” said JPMorgan.

“This lines up with our Love Index that shows only NAB in [the] ‘well-held’ [category], with all the other majors now in ‘under-held’.”

The ASX sectors professionals are buying into

The Love Index looks at the top 10 holdings of ASX 200 shares to determine which names are favoured by professional investors in the quarter and which aren’t.

While these investors have lightened their load on financial shares, they have been increasing their exposure to defensive and energy shares.

JPMorgan noted that allocation to defensives now stands at a five-year high. The weighting to energy has increased for the fourth consecutive month.

“March saw our universe of managers continue their shift to a more defensive footing (+10bp),” said JPMorgan.

“This marks a continuation of the pivot that started mid-last year, with the 1-year lift in defensive holdings approaching 70bp.”

ASX 200 shares fund managers are buying and dumping

There are three ASX 200 shares that have moved up into the “well-held” category on the Love Index in the latest quarter.

They include the Telstra Corporation Ltd (ASX: TLS) share price, Woodside Petroleum Limited (ASX: WPL) share price and South32 Ltd (ASX: S32) share price.

Meanwhile, ASX 200 shares that have fallen into “underheld” territory include the Woolworths Group Ltd (ASX: WOW) share price, Newcrest Mining Ltd (ASX: NCM) share price and ANZ Bank share price.

The post The ASX 200 shares that fund managers are buying and dumping appeared first on The Motley Fool Australia.

More reading

• Woolworths share price on watch amid strong Q3 sales growth
• 5 things to watch on the ASX 200 on Tuesday
• Own ANZ shares? Here’s what to expect from the bank’s half-year results
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Can ASX 200 banks live up to the $11 billion ‘big expectation’ when they report this month?

Motley Fool contributor Brendon Lau has positions in Australia & New Zealand Banking Group Limited, National Australia Bank Limited, Newcrest Mining Limited, South32 Ltd, Telstra Corporation Limited, and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/dvqCNgm

After a strong performance through most of 2022, BHP Group Ltd (ASX: BHP) has had a bit of a tough run over the past 2 weeks.

At market open this morning, the BHP share price is down 10% from Tuesday, 19 April, having closed yesterday at $47.98.

The other S&P/ASX 200 Index (ASX: XJO) mining giants have struggled over the past 10 trading days as well, though not quite as much.

The Rio Tinto Limited (ASX: RIO) share price, for example, is down 7.3% over the 2 weeks while Fortescue Metals Group Limited (ASX: FMG) shares have dropped a more modest 1.7%.

A common headwind hitting BHP shares along with Rio Tinto and Fortescue has been the slipping iron ore price, with fears that Chinese demand for the industrial metal could fall amid its reduced economic growth outlook.

Last week, iron ore fell 8.5% before regaining 5.4% over the past few days.

And according to Jess Amir, Australian market strategist at Saxo Bank, demand for iron ore looks set to rebound, which should help support the recovery in the BHP share price and the other top ASX 200 iron ore stocks.

World’s top 2 economies to splash cash on infrastructure

Iron ore is a key ingredient in steel production. And steel, in turn, is vital in the construction of buildings, bridges, roads, and most every type of infrastructure project.

Hence, when the world’s 2 biggest economies are planning major ramp ups in infrastructure spending, demand for iron ore should increase.

According to Amir:

Iron ore buying is expected to ramp up not only because of Chinese President Xi’s calls for ‘all-out efforts’ to boost infrastructure construction like it did in 2007-2008, but also as US President Biden’s $1.2 trillion infrastructure bill will be put to work.

Turning to the slumping BHP share price and the recent declines in Fortescue and Rio Tinto, Amir said, “This supports recoveries in BHP, Fortescue, and Rio still trading lower than 2-week highs.”

Amir also points to the juicy dividend yields offered by the ASX 200 miners, alongside their modest price to earnings (P/E) levels:

These three stocks offer the highest dividend yields in the market, and are far above the average 2.8% yield.

BHP has a yield of 10%, Rio Tinto 9.6%, and Fortescue 13.7%. BHP trades on 10.68 times earnings, Rio on 6.09 times earnings and Fortescue on 5.2 times earnings. And they all have free-cash flows, unlike most growth and tech stocks.

BHP share price snapshot

Although the miner has lost ground over the past 2 weeks, the BHP share price remains up 12.8% so far in 2022. That compares to a year-to-date loss of 3.5% posted by the ASX 200.

The post The BHP share price has lost 10% in 2 weeks. Here’s why this expert is tipping a recovery appeared first on The Motley Fool Australia.

More reading

• What’s the outlook for ASX 200 mining shares in May?
• April hasn’t been kind to the BHP share price. Here’s what went down
• ASX 200 mining shares just had their best trading day in 5 weeks. What’s next?
• Down over 10% in 10 days: Is the BHP share price a bargain buy now?
• Cash generation among ASX 200 iron ore shares will ‘be significant’ in 2022: expert

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/5s7bUDI

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened 

After a rough week, cryptocurrency assets are on the mend on Monday morning. The calendar has turned over to a new month and the stock market is up slightly with crypto assets climbing as well. Investors seem to be moving back into riskier assets and that’s broadly helping the cryptocurrency market slightly. 

From its low on Sunday to early Monday, Bitcoin (CRYPTO: BTC) was up as much as 3.1% and the value had jumped 4.2% from Saturday’s lows. Ethereum (CRYPTO: ETH) was up 3.9% from lows Sunday to highs early on Monday. Crypto exchange Coinbase Global (NASDAQ: COIN) was up as much as 8.5% in trading Monday and is up 6.9% as of 1 p.m. ET. 

So what 

Over the weekend, Berkshire Hathaway CEO Warren Buffett poured cold water on the cryptocurrency market once again, saying he wouldn’t pay $25 for all of the Bitcoin in the world. This is a long-running criticism from Buffett, who isn’t known as a bleeding-edge investor in technology companies. And with cryptocurrencies being so new and unproven in the financial markets it’s not surprising to hear more negative comments from Omaha. 

At Coinbase, over the weekend it was reported that the company has hired Durgesh Kaushik, formerly the head of Snap India, as senior director for market expansion. TechCrunch reported Kaushik helped grow Snap’s user base to about 130 million people in India and Coinbase doesn’t yet have a significant presence in the country.

One of the biggest opportunities for growth at Coinbase is international expansion. The exchange is popular in the U.S., but in the international market, it’s dwarfed by Binance and FTX. 

Now what 

Broadly, the cryptocurrency market has been very volatile so it’s no surprise to see the value of top cryptocurrencies and an exchange like Coinbase be volatile as well. But the market has been selling tech and growth stocks for months and these are the kind of assets that have been caught up in that, right or wrong. 

Over the next year, I think it will become clear how much of this sell-off has been foreshadowing a decline in cryptocurrencies overall and how much is a misunderstanding of crypto’s long-term potential. 

I think investors will see significant advancements for blockchains like Ethereum in scaling and lowering costs while companies like Coinbase continue to build out the infrastructure that traders and developers need. This will make the crypto market more accessible and innovative and with billions of dollars flowing into start-ups, it’s hard to tell where the industry will go from here. 

I wouldn’t take too much away from today’s trading as a result. It’s not clear if crypto and stock values have already hit bottom or if the market will drop further in the short term, but in the long term I think there’s a lot of value here for investors willing to hold on for the volatile ride. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Bitcoin, Ethereum, and Coinbase Jumped Today appeared first on The Motley Fool Australia.

More reading

• The top 2 cryptos of April unmasked
• What happened with the Bitcoin price in April?
• Why Shiba Inu, Ethereum, and Dogecoin are sinking today
• Crypto king Bitcoin to be dethroned by this hot rival: experts
• Bitcoin will be worth $590,000 by 2030: experts

Travis Hoium has positions in Berkshire Hathaway (B shares), Coinbase Global, Inc., Ethereum, and Snap Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares), Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns and has recommended bitcoin and Ethereum. The Motley Fool Australia has recommended Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/RGD8tP0

It has been a day to forget for the Booktopia Group Ltd (ASX: BKG) share price.

In morning trade, the online book retailer’s shares have crashed 26% to a record low of 46 cents.

This means the Booktopia share price is now down 67% since the start of the year.

Why is the Booktopia share price crashing today?

Investors have been selling down the Booktopia share price on Tuesday after the ecommerce company revealed the shock resignation of its CEO and that its performance has continued to deteriorate.

In respect to the former, Booktopia’s CEO and co-founder, Tony Nash, has informed the board of his intention to step aside. Though, he will continue as a full-time senior executive and director with the company in a new position focused exclusively on growth.

Mr Nash commented: “I look forward to continuing to find ways to grow the business while handing over the duties that come with being the CEO of a larger and listed entity. It’s time to hand over the leadership reins to someone who is more capable than me at that job description. I am genuinely looking forward to working with, and for, the new CEO.”

Booktopia has commenced a search to identify and secure a new CEO. Mr Nash will remain in the role until a replacement is appointed and then transition responsibilities to the new CEO.

Trading update

Also weighing on the Booktopia share price today has been an update on the company’s performance during the third quarter.

That update revealed that revenue for the quarter fell 1% over the prior corresponding period to $64.5 million. Management blamed this on the disrupted start to the academic year, resulting in lower overall revenue from academic book sales which have traditionally contributed strongly to third quarter performance.

Things were even worse for its earnings before interest, tax, depreciation and amortisation (EBITDA) in the third quarter. Booktopia’s EBITDA fell 65% to $1.5 million due to the combined impact of increased operating expenses and lower academic book sales.

Based on the above, the company’s revenue for the nine months to 31 March is now up just 9% to $194.7 million and its EBITDA is down 63% to $5.5 million.

Outlook… not so good

Unfortunately, things aren’t expected to improve in a hurry. In fact, they appear set to get worse before they hopefully get better.

For example, management has provided full year guidance of revenue of approximately $242 million and EBITDA of $3 million to $4 million. The latter means the company will be making an operating loss of $1.5 million to $2.5 million during the fourth quarter.

However, the company intends to address its lack of profitability by reassessing its cost base to ensure business costs and investments are more aligned with the company’s current growth trajectory. This will see the company aim to “create the step-change needed to reset the business thus allowing Booktopia to return to a sustainable level of growth and profitability as soon as possible.”

Judging by the Booktopia share price performance today, some investors aren’t sticking around to see if these initiatives are a success.

The post Booktopia share price crashes 26% on earnings dive and shock CEO exit appeared first on The Motley Fool Australia.

More reading

• Here are 2 ASX tech shares to buy according to brokers

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Booktopia Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/AuFgoNr

The S&P/ASX 200 Index (ASX: XJO) was out of form during a very volatile April. The benchmark index lost 0.9% of its value during the month to end it at 7,435 points.

Although a good number of shares dropped with the market, some fell more than most. Here’s why these were the worst performers on the ASX 200 in April:

EML Payments Ltd (ASX: EML)

The EML Payments share price was the worst performer on the ASX 200 in April with a massive 47% decline. The catalyst for this was the release of the payments company’s trading update. During the third quarter, EML saw its net profit drop 22% on the prior corresponding period. This was driven by a poor performance from its European prepaid business and higher costs. And with management expecting the fourth quarter to be just as challenging, it was forced to downgrade its full year guidance.

Megaport Ltd (ASX: MP1)

The Megaport share price was sold off in April and sank 37.5% during the month. This was driven by weakness in the tech sector and the release of a disappointing third quarter update from the network as a service provider. In respect to the latter, for the three months ended 31 March, Megaport reported modest quarter on quarter revenue growth of 5% to $27.9 million. This was well short of the market’s expectations and led to consensus estimate downgrades.

Life360 Inc (ASX: 360)

The Life360 share price had a month to forget and sank 32% over the period. The majority of this decline came towards the end of the month following the release of the location technology company’s quarterly update. This was despite that update revealing a 129% increase in revenue to US$52.7 million and a 73% jump in annualised monthly revenue to US$166.1 million. Weaker than expected cash flows and news that Life360 is scrapping its US dual listing plans appeared to overshadow its strong top line growth.

Zip Co Ltd (ASX: ZIP)

The Zip share price continued its slide during April and dropped a further 26.2%. This means the Zip share price is now down 86% over the last 12 months. Investors were selling the buy now pay later provider’s shares after its third quarter update disappointed the market. This saw a number of brokers take an axe to their valuations. For example, the team at Jefferies retained their underperform rating and slashed their price target by 46% to $1.00.

The post These were the worst performing ASX 200 shares in April appeared first on The Motley Fool Australia.

More reading

• April was a disastrous month for the Zip share price. Here’s why
• If you’d bought $10,000 of Bendigo Bank shares 10 years ago, guess how much you’d have now
• 5 things to watch on the ASX 200 on Tuesday
• The CBA share price was the worst performer of the ASX 200 big banks in April. What happened?
• Why is the Webjet share price beating the ASX 200 today?

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended EML Payments, Life360, Inc., and MEGAPORT FPO. The Motley Fool Australia has positions in and has recommended EML Payments. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/GCTBql4

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric-car leader Tesla (NASDAQ: TSLA) dropped more than 2% in early trading Monday, dragged down by a series of apparently bad news headlines. That’s the bad news.

The good news is that Tesla stock has already recovered its gains and is heading back higher as of 10:30 a.m. ET — on investors’ conclusion that the news isn’t really as bad as it first appeared.

So what

Let’s take these headlines one at a time.

Tic-tac-toe, three in a row, first Barron’s reported over the weekend on investor concerns that Tesla CEO Elon Musk’s deal to buy Twitter for $44 billion could leave Musk loaded with debt and at risk of having to sell more Tesla shares — with a deleterious effect upon Tesla’s stock price. Barron’s, however, believes Musk has the situation well in hand and, indeed, just last week Musk confirmed that he has “no further TSLA sales planned” after raising all the cash he needed through Thursday.  

That crisis averted, Tesla proceeded to spook investors further this morning when it filed an amended 10-K/A form with the Securities and Exchange Commission (SEC) advising that its “proxy statement for the 2022 annual meeting of stockholders” will be delayed a bit. But if all Tesla is doing is getting its financial ducks in a row preparatory to implementing a stock split — as it hinted it’s contemplating back in March — then a slight delay in the proxy statement might not be bad news at all.    

Last but not least, this morning we learned that lockdowns to combat the spread of the coronavirus in China have limited deliveries of electric cars by local automakers Nio, Li Auto, and XPeng to just 18,000 units — their worst showing in the past year. If Tesla finds its own production and deliveries crimped by these same factors, as could happen, then investors may be right to worry about Tesla missing its sales targets this quarter as well.  

Now what

But here’s the thing: Tesla just finished crushing on sales and earnings in its first-quarter earnings report, despite suffering three weeks of factory shutdowns because of the coronavirus in China. But with two other new Gigafactories (in Texas and in Germany) to pick up the slack, Tesla still expects to grow production 60% this year.

What’s more, even in Shanghai, Musk says his Gigafactory production is “coming back with a vengeance.” Over the weekend, Shanghai cautiously reported that it seems to have contained COVID-19 spread to within only the areas it has quarantined, with no new cases reported outside those areas for the first time since the outbreak began. And this opens up the possibility that Shanghai could add to Tesla’s production this year, not subtract from it.  

Once again, it appears that Tesla has dodged a bullet. Three of them, in fact. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock dropped, then popped on Monday appeared first on The Motley Fool Australia.

More reading

• Elon Musk just sold $5.6 billion of Tesla shares. What’s the deal?
• Why Tesla stock is bouncing back today
• Why Tesla stock just crashed 7%
• Why Dogecoin is rising today
• Why Tesla shares dropped on Monday

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nio Inc., Tesla, and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/kSpw0HB

The Core Lithium Ltd (ASX: CXO) share price is pushing higher on Tuesday morning.

At the time of writing, the lithium developer’s shares are up 2.5% to $1.36.

Why is the Core Lithium share price rising?

Investors have been bidding the Core Lithium share price higher today following the release of a positive update.

According to the release, Core Lithium has been granted environmental approval for the BP33 Underground Mine at the Finniss Lithium Project in the Northern Territory.

The release notes that the grant of the environmental approval completes the environmental impact assessment process for the proposed BP33 Underground Mine. This paves the way for the company to submit its mining management plan (MMP) to the Department of Industry, Tourism & Trade (DITT) for assessment.

If all goes to plan, Core Lithium anticipates that a successful review of the MMP by DITT could result in a mining authorisation for BP33 Underground Mine being provided by mid-2022. This will be the last step in the BP33 Underground Mine approvals process.

“Exciting milestone”

Core Lithium’s Managing Director, Stephen Biggins, believes this is an exciting milestone.

He commented: “The grant of environmental approval for the BP33 Underground Mine is another exciting milestone achieved by Core in the development of the Finniss Lithium Project. The BP33 Underground Mine is the second mine approved at Finniss with mining at Grants commencing in late 2021. BP33 is a higher-grade orebody than Grants with recent deep drilling supporting the interpretation that BP33 mineralisation is improving with depth.”

Commenting on the grant, Northern Territory’s Labor Government Minister for Environment, Eva Lawler, said: “The Territory Labor Government’s reformed environment protection legislation commenced in 2020, providing Territorians with an improved environmental regulatory regime. This Environmental Approval follows a thorough assessment of potentially significant environmental impacts by the NT EPA – it is the second to be granted under the EP Act, and the first for a mine. We will continue to work with Core Lithium on this project to ensure the best outcomes.”

The post Core Lithium share price charges higher amid ‘exciting milestone’ appeared first on The Motley Fool Australia.

More reading

• Core Lithium share price slips despite positive news
• Core Lithium share price charges higher amid quarterly update
• Why is it such a mixed day of trade for ASX lithium stocks?
• The Core Lithium share price is sinking 6% today. Why?
• What are the 10 biggest ASX shares in the lithium space

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/8B3NnHs

The Zip Co Ltd (ASX: ZIP) share price’s poor performance continued last month.

As of the final close of April, the Zip share price was $1.10, 26.17% lower than it ended March.

The tumble saw the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) giant’s shares down nearly 75% year to date.

For context, the ASX 200 slipped 0.86% last month and, as of the end of April, it had fallen 2.04% in 2022.

Let’s take a look at what’s been going wrong for Zip lately.

What went wrong for the Zip share price last month?

The Zip share price spent nearly the entirety of April in the red, save for 3 sessions.

In fact, the stock tumbled to a new multi-year low of $1 near the end of last month.

Perhaps unsurprisingly, there wasn’t much good news from the BNPL company over the period.

It announced disappointing results of its share purchase plan early in the peace before posting a mixed performance for the third quarter.

Zip’s share purchase plan aimed to raise $50 million. It followed a $148.7 million institutional placement wherein new shares in the BNPL giant were offered for $1.90 apiece.

The share purchase plan closed on 1 April, but its results were no joking matter.

The company managed to raise just $23.98 million – not quite half of its anticipated revenue – as new shares were handed out for just $1.47 each under the plan.

The Zip share price slumped 4.52% following the news. It plunged another 4.96% on the back of its quarterly results, released later in the month.

The company reported increases to its revenue and transaction volumes. Though, the improvements seemingly represented a slowing of Zip’s previous growth. Additionally, its credit losses deepened over the quarter.

On the back of its results, many notable brokers dropped their expectations of the stock, slashing their price targets to as low as $1.

Fortunately, the Zip share price pulled itself up by its bootstraps on Friday to record an 8.91% gain, ending the month at $1.10.

The post April was a disastrous month for the Zip share price. Here’s why appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• TGIF: Why is the Zip share price rocketing 10% today?
• Zip share price finally rebounds with its first positive session in 5 days
• Zip share price slides another 5% to new multi-year low of $1
• These are the 10 most shorted ASX shares

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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/bTEwr3F

The AGL Energy Limited (ASX: AGL) share price is under the spotlight today as Atlassian billionaire Mike Cannon-Brookes launched an attempt to build a blocking stake in the energy business.

For readers who didn’t see what happened earlier this year, Mr Cannon-Brookes and Brookfield tried to buy AGL outright.

However, in early March, the AGL board rejected the improved ‘indication of interest’ from Mr Cannon-Brookes and Brookfield. That offer was $8.25 per share. The AGL board said that price was “still well below both the fair value of the company on a change of control basis and relative to the expected value of the proposed demerger.”

AGL is pursuing a demerger to split its energy retailing and energy generation segments. However, Mr Cannon-Brookes doesn’t think that’s the right choice environmentally or for shareholders.

Cannon-Brookes launches blocking bid

According to reporting by the Australian Financial Review, Mr Cannon-Brookes’ Galipea Partnership acquired almost an 11.3% stake in AGL by using derivatives.   

AGL is going to need 75% of shareholder votes to approve the demerger.

The newspaper reported that in a letter to the AGL board, Mr Cannon-Brookes said the plan to demerge was “globally irresponsible” and “flawed”. He also said the plan “risks a terrible outcome for AGL shareholders, AGL customers, Australian taxpayers and Australia.”

Bearing in mind that the last takeover offer was at an AGL share price of $8.25, the stake that was just acquired was bought in two separate transactions at $8.46 per share and $8.62 per share.

After making this transaction, Mr Cannon-Brookes is now the largest shareholder of the business. One of the main reasons he wants to stop the demerger (and buy the business) is that AGL is reportedly Australia’s largest carbon emission emitter.

Mr Cannon-Brookes believes that a greener future would be more beneficial for the company and shareholders. He wrote in the letter:

We have purchased this substantial interest in the company because we fundamentally believe there can be a better future for AGL.

A future that delivers cheap, clean and reliable energy for customers. A future that accelerates the transition to net-zero, and a future that creates opportunities for AGL and value for its shareholders along the way.

The AFR also quoted what Mr Cannon-Brookes said after the launch of the bid:

After we get through the demerger vote, we can work out how to reimagine, refresh and reinvigorate the company, but that will be for afterwards. My expectation is to be on the shareholder register for a very long time.

I’ve got a pretty good track record when it comes to business, understand technology pretty well, I’m pretty intimately involved with the energy industry…so I think I have some skills that are highly aligned with what this company needs to grow and prosper.

Investors may be questioning whether AGL could simply do what Mr Cannon-Brookes is proposing as two separate businesses. Mr Cannon-Brookes has an answer for that – being one company would “make it more resilient and able to reduce emissions faster.”

AGL still plans to demerge

Despite the growing campaign to block the demerger, AGL’s board said it’s still committed to the plan and still thinks it’s in the best interests of shareholders.

The plan is that AGL Australia will be an energy retailer and be backed by a portfolio of firming, storage and renewable assets.

Accel Energy will be Australia’s largest electricity generator by providing low-cost energy, while “driving the energy transition” by repurposing existing generation sites into low-emission industrial hubs and progressing a pipeline of renewable energy projects.

The board tried to sell the deal by saying it will give each company the freedom to pursue individual strategies and growth initiatives. It “supports shareholder returns through distinct dividend policies and capital structure” and it leaves the future value of two ASX-listed companies with shareholders.

AGL share price snapshot

Over the last month, AGL shares have risen by around 7%. That includes a slight fall following the release of yesterday’s updated FY22 guidance. In the update, AGL advised underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is now expected to be between $1.23 billion and $1.3 billion, down from guidance of $1.275 billion and $1.4 billion.

Underlying net profit after tax (NPAT) is expected to be between $220 million and $270 million. This is down from the previous guidance range of between $260 million and $340 million.

This came after the generator fault at Loy Yang A Power Station in Victoria.

The post AGL share price in focus amid Cannon-Brookes raid appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: NAB’s AUSTRAC update, AGL downgrades guidance, Qantas takes off
• AGL share price tumbles on earnings guidance downgrade
• How much is the AGL dividend payout ratio?
• Why is the AGL share price outperforming today?
• Own AGL shares? Experts weigh in on outage fallout

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Atlassian. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/DQ2YP5t