The AMP Ltd (ASX: AMP) share price can’t seem to catch a break, with investors abandoning the financial services company. This has led its shares to sink 20% since this time last month despite AMP announcing a number of updates.
The company’s shares hit a low of 91.5 cents on 7 December. That’s a smidgen off its multi-decade low of 88.5 cents reached in late September.
At Friday’s market close, AMP shares registered a 1.56% loss to 94.5 cents.
AMP focuses on planned demerger and strategy
The path for the new AMP has seen management implement a number of sweeping changes to drive greater business efficiencies. By simplifying its operating models, this enables the company to address the different clients, geographies, cultures, and growth trajectories across the group.
Last month, AMP provided an update regarding its planned demerger for AMP Limited and AMP Capital’s Private Markets business (PrivateMarketsCo).
It noted that the operational separation is on track for end of 2021, with the demerger effective in June 2022.
However, the AMP share price has taken a dive regardless of the announcement. This can be drawn from the recent impairment charges of $325 million weighing down the company’s balance sheet.
In addition, news broke that AMP may need to raise capital to fund its businesses post-merger. Costs associated with the separation and transformation of AMP are expected to be up to $295 million within the coming years.
A small shareholding sale facility conducted during 27 November and 2 December saw AMP shareholders offload the company’s shares. The facility reached out to its 700,000 shareholders who retain a value of $500 or less in AMP shares.
In total, 205,148 AMP shareholders sold about 52.03 million AMP shares at a price of $1.0929 per share. This represented the volume-weighted average price received by the broker for all the shares sold under the facility.
AMP previously stated that the sale facility will reduce administration and registry costs associated with servicing small shareholdings.
About the AMP share price
Adding further disappointment, the AMP share price has continued to slide in the last 12 months, down 45%. Year-to-date, its shares are hovering around a 40% loss for the period.
This is in stark contrast to the S&P/ASX 200 Financials Index (ASX: XFJ) which has gained 15% from this time last year. In 2021, the index has pushed 18% higher.
AMP presides a market capitalisation of roughly $3.09 billion, with approximately 3.27 billion shares outstanding.
The post Why has the AMP (ASX:AMP) share price fallen 20% in a month? appeared first on The Motley Fool Australia.
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More reading
- November was a rollercoaster month for the AMP (ASX:AMP) share price. Here’s why
- Own AMP shares? Here’s why the company could be looking to raise capital
- Top brokers name 3 ASX shares to sell next week
- Are AMP (ASX:AMP) shares priced as though ‘the situation is worse than it is’?
- Top brokers name 3 ASX shares to sell 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 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 Bruce Jackson.
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