The Aussie Broadband Ltd (ASX: ABB) share price had a difficult month in June.
To finish the month, shares in the telco fell more than 20% into the red, bringing losses to over 30% for the year to date.
In broad market moves, the S&P/ASX 200 Communication Services Index (ASX: XTJ) also slipped 3.5% into the red last month and is down 16% since January.
What’s up with the Aussie Broadband share price?
Despite no news from the company in June, investors sold off Aussie Broadband shares at pace last month in tandem with the broad sector and the wider market.
The last we heard from the telco was back in May regarding its Q3 FY22 update. It reported a 42% year on year increase in total active broadband services to 697,083.
These figures weren’t inclusive of Aussie Broadband’s acquisition of fellow telco provider Over The Wire on 15 March 2022.
Folding in the acquisition and the company expects “annual cost synergies of between $8â$12 million within 3 years”.
Over The Wire is expected to deliver approximately $11 million in EBITDA “for the 3.5 months that ABB has owned OTW” in FY22.
Market punishment
Investors weren’t satisfied with the announcement at all and sent the share tumbling.
Just a week earlier investors had piled into Aussie Broadband shares at pace, driving prices to a 52-week high of $5.95 on 21 April.
However, shares plunged more than 28% on the day of the trading update announcement.
The market underwent a serious correction in June and ASX telecommunications shares weren’t immune to downside.
The broader communications sector was hit equally as hard and the XTJ fell to a 52-week low on 17 June.
As seen on the chart below, the Aussie Broadband share price followed suit soon after. It is now down 29% this year to date but has clipped a 13% gain in the last 12 months.
The post Why did the Aussie Broadband share price fall 20% in June? appeared first on The Motley Fool Australia.
Wondering where you should invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now
See The 5 Stocks
*Returns as of June 1 2022
(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}
setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()
More reading
- âJust didnât cut itâ: Look out Telstra, a new high-speed start-up is coming for you!
- Down 47% in 2 months, is the Aussie Broadband share price an opportunity calling?
- Aussie Broadband share price dips despite telco named âAustraliaâs most trustedâ
- Down 20% in 2022, is the Aussie Broadband share price a no-brainer buy?
Motley Fool contributor Zach Bristow 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/ecHGmhU
Leave a Reply