The Tyro Payments Ltd (ASX: TYR) share price closed down 12.6% on Monday following a trading update released on Monday morning. The trading update outlined the recent effects of the coronavirus on the company’s business and was one in a series of weekly updates released to the market about the company’s transaction volumes.
Why is the Tyro Payments share price down?
The announcement revealed that payments for June so far were up 6% on the same month in 2019. While this may seem positive, it was probably a lot less than the market was hoping for, given that the worst of the coronavirus lockdowns have eased. It showed that Tyro payments is no longer experiencing the type of growth it saw prior to the coronavirus pandemic.
Growth in January was up 27% on January 2019 and growth in February was up 30% on the same month in 2019. March saw an increase of only 3% with April and May showing steep declines. Transactions in April were down 38% on the same period in 2019 and in May were down 18% on March of the prior year.
Tyro mainly relies on brick and mortar retailers for revenue and it is possible that those merchants have seen a permanent decline in their sales. This could affect the value of Tyro’s transactions in the long term.
Who has been selling Tyro Payments shares?
Also announced on Monday was the reduction in holdings of Tyro Payments shares by fund manager, Fidelity. Recently, Fidelity sold 9,934,175 shares. This took their holding in the company to 6.25%, down from 8.27% previously. Fidelity sold the shares for between $2.66 and $4.26. Fidelity reported that they sold shares between 27 April and 10 June.
How have Tryo Payments shares performed this year?
Tyro listed on the ASX late in 2019 at an IPO price of $2.75. Tyro shares are down 26.3% from its 52-week high of $4.53 reached in February. It is down 4.5% from its share price of $3.50 at the beginning of the year. The company’s share price has had a bumpy ride as a result of the coronavirus and its effect on retailers. In March, the company’s share price hit a low of 97 cents. The Tyro Payments share price closed at $3.32 on Monday.
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Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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