The Magellan share price has crashed 50% in 2022. Is the company looking for a buyer?

Woe, thy name is the Magellan Financial Group Ltd (ASX: MFG) share price. Magellan shares have had an absolutely awful run over the past two years. Once venerated as the leading fund manager and investment company on the ASX, Magellan has seen its star fall dramatically over the past 24 months.

Back in February 2020. Magellan was a $65 share. Back in November 2020, the company was still commanding a price of around $55. Today, this company is a shell of what it once was, and is asking just $9.40 a share at the time of writing (down 2.79% for the day today).

Magellan shares have crashed 50% over 2022 year to date, and by 70% over the past 12 months. The company is down more than 85% from its all-time highs.

Magellan’s woes can be put down to a few factors: namely chronic underperformance of its funds leading to an exodus of investors, and the loss of its co-founder and former chief investment officer Hamish Douglass.

Douglass has caused some fresh concern with investors this week after it was revealed yesterday that he had sold off more than half of his ownership stake in Magellan. Douglass offloaded approximately 13 million shares for a price of $9.10 per share (worth around $118.3 million). This reduced his holding from 21.45 million shares to 8.45 million.

Was Hamish Douglass looking for a buyer for his Magellan shares?

However, it appears that there is a possibility Douglass was doing more than just offloading his Magellan shares.

According to reporting in The Australian this week, Douglass is also rumoured to have been asking around about a potential buyer for his Magellan stake. The report suggests Douglass has approached Phil King, of Regal Funds Management, about a possible buyout of Douglass’ Magellan holdings. That’s in addition to approaching Challenger Ltd (ASX: CGF) as well.

Buying out Douglass’ stake would give any potential suitor a hefty beachhead to launch more buy-ups of the company’s stock.

However, it is understood that both Regal and Challenger have rejected Douglass’ alleged advances.

If these rumours are true, it’s hardly a vote of confidence from Douglass over Magellan’s future. And it’s also the last thing investors probably want to hear right now. The Magellan share price will be an interesting one to watch going forward, that’s for sure.

The post The Magellan share price has crashed 50% in 2022. Is the company looking for a buyer? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 recommended Challenger Limited. 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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