Why is the Megaport share price receiving a 9% spanking today?

It has been an eventful morning for the Megaport Ltd (ASX: MP1) share price on Thursday after coming out of a trading halt.

Presently, shares in the network-as-a-service provider are dumping 9.38% to $5.99. The disappointing move is, unfortunately, an encore to a sickening 22% slump yesterday amid the company’s first-quarter update.

Let’s take a look at what is causing dismay among shareholders today.

Oopsie doesn’t go unpunished

Before the market opening, Megaport requested that its shares be temporarily paused pending a further announcement.

Given the recency of its first-quarter update — and the cold reception it received — this likely put investors on edge. Fast forward roughly an hour, and the data interconnectivity provider had released the price-sensitive mishap.

According to the release, an error had been made when converting several of the company’s figures to Australian dollars, sending the Megaport share price reeling.

Specifically, the details requiring amendment related to numbers featured on slide 11 of Megaport’s Q1 investor presentation, as shown below.

While the market is reacting negatively to the news, the revisions were mostly positive. For reference, the adjustments were:

• Capital expenditure (including IP change) reduced from A$16 million outflow to A$14.4 million
• Cash flow used in investing activity reduced from A$15.8 million outflow to A$14.2 million
• Net cash flow changes reduced from A$13.9 million to A$12.3 million
• Effect of foreign exchange movement changed from a A$0.8 million gain to a A$0.8 million loss

The last line item appears to be the only negatively impacting adjustment of the bunch.

In addition, the company noted there were no changes to its previously reported cash balance, USD cash flow, or Appendix 4C.

Is there a positive to the Megaport share price?

For shareholders, today’s pain only adds to what has been a painful year for Megaport shares. In 2022, the company’s value has deteriorated to the tune of 69%. However, there is still a positive to be considered, according to analysts at Jefferies.

Following Megaport’s Q1 figures, Jefferies revealed it expects the company to be free cash flow positive by the second half of FY25. Although, the team still reduced its Megaport share price target from $9.60 to $7.54 in light of the slower growth.

The post Why is the Megaport share price receiving a 9% spanking today? appeared first on The Motley Fool Australia.

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More reading

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• Why did the Megaport share price crash 22% today?
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Motley Fool contributor Mitchell Lawler 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 MEGAPORT FPO. 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.

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