The Unibail Rodamco Westfield (ASX:URW) share price closed up 4.69% today, after being up more than 6% in late afternoon trading. This follows today’s announcement on the company’s contested plan for a 3.5 billion-euro (AU$5.8 billion) capital raising.

It’s been a difficult year for Unibail. Its portfolio of retail and office complexes has suffered from the lockdowns and social distancing put into place to slow the spread of COVID-19.

After trading at $11.25 per share on 7 January, its been mostly downhill for the Unibail share price, which closed at $2.90 per share today. That represents a year-to-date loss of 74%.

What does Unibail Rodamco Westfield do?

Unibail is one of Europe’s largest commercial real estate companies, owning a portfolio of quality retail and office complexes. It has assets in Europe, the United Kingdom and the United States.

Unibail acquired Australian shopping centre operator Westfield Corporation, created by the split of Westfield Group, in 2018. This saw Unibail shares first listing on the ASX. The company makes up part of the S&P/ASX 200 Index (ASX: XJO).

What sent the Unibail share price higher?

In an announcement released to the ASX this morning, Unibail revealed that independent proxy advisory firm ISS has recommended Unibail shareholders vote to support its 3.5 billion euro capital raising. The vote will take place on 10 November at the company’s extraordinary general meeting.

The fully underwritten capital raising is part of the company’s broader 9 billion euro ‘reset plan‘, announced on 17 September. Unibail intends to immediately deploy the money from the capital raise to pay down its debt obligations.

Much of the reset plan – which includes 4 billion euros worth of asset disposals – was largely uncontested. However, the capital raising met with strong opposition from activist investors, led by French telco billionaire Xavier Niel, who together own 4.1% of Unibail’s shares.

Following the ISS support for the capital raising, Unibail reiterated today that it was “an essential element of the group’s RESET plan”. The company said it provided an “immediate solution to strengthen the group’s balance sheet in a volatile and uncertain environment, while preserving the group’s flexibility for the future”.

More reading

• ASX 200 ends down 0.6%, AMP (ASX:AMP) share price jumps 20%
• Here’s why ASX cannabis shares are falling today
• It’s not just Aussie Millennials driving the Afterpay (ASX:APT) share price to new records
• ASX 200 flat: ResMed smashes expectations, AMP surges on takeover talks
• Why the AMP (ASX:AMP) share price could be set to rocket higher today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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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The Saracen Mineral Holdings Limited (ASX: SAR) share price gained 50% over the past 12 months. That gives the company a market cap of more than $6 billion at today’s price of $5.64 per share.

Saracen’s share price has gained twice as much as the price of gold since this time last year, which saw gold go from US$1,495 per ounce to US$1,877 per ounce today. A gain of 25%. Of course, that’s still well down from the 6 August peak, when the yellow metal was trading for US$2,063 per ounce.

Saracen shares hit their own peak on 27 July, at $6.48 per share, an all-time high. Since then the share price has dropped 14%.

Despite the recent slide, Saracen’s strong performance helped billionaire Kerry Stokes add $570 million to his wealth.

What does Saracen do?

Saracen Mineral Holdings is an Australian gold producer. All 3 of its mines – Carosue Dam, Thunderbox and the Super Pit (50% ownership) – are located within 300 kilometres of Kalgoorlie, Western Australia. The company forecasts it gold production will increase from some 500,000 ounces in this financial year to more than 600,000 ounces in the coming financial year.

Saracen is part of the S&P/ASX 200 Index (INDEXASX: XJO).

How did Saracen’s share price help stoke Kerry Stokes’ billions?

According to the Australian Financial Review‘s Rich List, Stokes wealth grew 10.2% year-on-year, reaching $6.3 billion.

Now if you’re like me, when you think of Kerry Stokes gold mining won’t be the first thing that comes to your mind. Stokes is far more widely associated with the media. Namely Seven West Media Ltd (ASX: SWM), which has a large presence in broadcast television, print and online publishing.

But it certainly wasn’t the Seven West Media share price that saw Stokes’ wealth balloon. Seven West’s share price is down 58% over the past 12 months.

Rather, as the AFR‘s Rich List revealed, Stokes made hay from his Saracen shareholdings. Remarkably, his holdings in the Aussie gold miner were worth more than the entirety of Seven West Media.

It remains to be seen how ASX gold shares will perform over the next 12 months. While many factors continue to support gold prices, the World Gold Council reported that the world’s central banks became net gold sellers for the first time in 10 years in the third quarter of 2020.

Though Saracen’s fortunes also ride on the productivity of its mining assets, the price of gold will be a big factor in determining Saracen’s future share price moves.

More reading

• Why market crashes are useful for buying ASX dividend shares
• 5 things to watch on the ASX 200 on Thursday
• How did ASX gold shares perform in the last quarter? 
• 5 things to watch on the ASX 200 on Wednesday
• Why Saracen (ASX:SAR) is on track to achieve FY21 guidance

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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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Mosaic Brands Ltd (ASX: MOZ) announced at its AGM yesterday it was closing 250 stores in preference for online sales avenues. Consequently, the Mosaic share price has lifted by 5.56% to 66 cents in today’s trading. This follows a lacklustre performance since the start of the week. 

Good news for the Mosaic share price?

Mosaic Brands is one of the largest fashion retail groups in Australia and New Zealand. It holds such brands such as W.Lane, Katies, Rockmans, Crossroads, and Rivers, as well as 50.1% of EziBuy.

FY20 broke four consecutive years of growth and profitability. Not a great start. However, Mosaic is in a discretionary retail sector, which took much of the brunt of the COVID-19 lockdowns nationwide. Given the year everyone has lived through, the company acknowledged the performance slump was inevitable. It was impacted by bushfires, lockdowns, the shift to online shopping and a rental spat with shopping centre landlord Scentre Group (ASX: SCG).

Since the start of the year, the Mosaic share price is down by 71%.

In particular, the company believes the shift to online shopping is both structural and permanent. Chairman Richard Facioni told shareholders:

The online shift is permanent, which has implications for the physical retail footprint and unrealistic rent expectations from landlords.

Stores are and will always remain a central part of Mosaic Brands and serving our customers. But not at the cost of unrealistic rents, nor landlord expectations that pre-date the internet.

In August we informed the market that up to 500 of our 1300 plus store portfolio nationally could be closed if realistic rental agreements were not struck.

The move online

Across FY20 the company recorded a 15% increase in online sales to just under $100 million. In the first quarter of FY21 it has already increased further by 31%. While the lock down situation in Victoria likely contributed, the company has no doubt that online sales will be more important than at any time previously.

The company has also reduced inventory by 50% in a change to operating practices. This, combined with reduced discounting and online sales has allowed it to increase margins to 67%. Up from 61.8% for the previous corresponding period (pcp). Moreover, the Mosaic Brands has decided to delay its planned acquisition of the other 50% of EzyBuy by 6 months in an effort to conserve cash. 

Foolish takeaway

The challenge of whether online sales volumes will remain permanent is an area of some debate. Nonetheless, Mosaic has already delivered a large scale increase in online sales with most of the country out of lockdown. The decision to close 250 stores seems to be recognition of this, and a tough line on costs and margin preservation. Investors appear to be happy with this prudential approach, driving the Mosaic share price upwards since yesterday.

More reading

• These beaten-up shares are about to pick up: Moody’s
• Reject Shop (ASX:TRS) share price tumbles but it’s property stocks that should be worried
• 5 ASX 200 events to watch for this week
• Is Vicinity Centres (ASX:VCX) a top ASX dividend share?
• How ASX 200 investors can collect a rent check from Bunnings Warehouses

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. 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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A Sigma Healthcare Ltd (ASX: SIG) executive has been charged with 2 counts of insider trading.

Sigma, a pharmaceutical wholesaler, was supplying the major retail chain Chemist Warehouse in 2018.

However, on 2 July 2018, Sigma announced to the ASX that agreement could not be reached in renewing the supply deal. The share price immediately sunk 40% that day.

Sigma general manager Michael John Story of Elwood, Victoria is alleged to have sold off his shares before this announcement.

The Australian Securities and Investments Commission alleges Story knew how the negotiations between Sigma and Chemist Warehouse were going when he disposed of his stocks.

Story sold off 645,047 Sigma shares on 9 May 2018 and another 250,000 on 21 June.

The two charges of insider trading are violations of section 1043A of the Corporations Act 2001.

Although the current maximum penalty for such a breach is 15 years’ jail, at the time of Story’s alleged offences it was 10 years.

Commonwealth Director of Public Prosecutions is now in charge of the case, which will next be heard at a committal mention hearing at Melbourne Magistrates Court on 18 December.

Sigma shares dropped 0.93% to 53 cents near close of trade this afternoon.

More reading

• Is the Coles (ASX:COL) share price in the buy zone?
• Why the Zoono (ASX:ZNO) share price surged 7% this week
• ASX 200 ends down 0.6%, AMP (ASX:AMP) share price jumps 20%
• Japara Healthcare (ASX:JHC) announces $292 million loss at AGM
• Why the Carsales (ASX:CAR) share price dropped 4% today

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. 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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The Coles Group Ltd (ASX: COL) share price has been a strong performer in 2020.

Since the start of the year, the supermarket giant’s shares are up over 18%.

This compares to an 11.5% decline by the S&P/ASX 200 Index (ASX: XJO) over the same period.

Is it too late to buy Coles shares?

I don’t believe for a second that it is too late to buy Coles shares and continue to see a lot of value in them for long-term focused investors.

One broker that agrees with this view is Goldman Sachs. Its analysts have just retained their buy rating and lifted the price target on the company’s shares to $20.50 following the release of its first quarter update.

This price target implies potential upside of 15.5% for its shares excluding dividends and just over 19% including them.

What did Goldman Sachs say?

Goldman notes that Coles delivered a first quarter update ahead of its expectations this week.

It commented: “Coles group reported 1Q21 sales at A$9,607mn, +10.5% yoy ,+2.6% vs. GSe and including comp store sales growth of 9.7% (7.7% ex Vic and 57% online growth).”

And while the broker notes that its growth slowed towards the end of the first quarter, it feels confident that another strong quarter lies ahead.

“Sales momentum has slowed over end of 1Q21 and into 2Q21 to date (6.4% comp, 5.4% ex Victoria, 45% online growth), however we remain confident of the outlook for 2Q21 due to COL and industry feedback suggesting the sector is well placed for a strong Christmas trading period,” it explained.

What about the full year?

Following this strong first quarter, the broker has lifted its full year earnings before interest and tax (EBIT) forecast by 0.7% to $1,897 million. This represents growth of 7.6% year on year.

Looking further ahead, Goldman suspects that its might be hard for Coles to repeat its heroics in FY 2022 and is forecasting flat sales. However, due to its belief that the company’s margins will widen next year, it expects FY 2022’s EBIT to come in 5% higher year on year at $1,997 million.

Goldman explained: “We expect the higher growth rate in FY21 to be offset in FY22, implying no change in sales levels for FY22 except in the Liquor division where we believe Coles’ strategic change has resulted in an improvement in the base sales. Overall, we revise FY22 and FY23 EBIT marginally, by +0.2%.”

I think the broker is spot on and feel Coles would be a great option when the market reopens next week.

More reading

• 5 ASX 200 broker updates after quarterly earnings season
• Why Coles, HUB24, Mesoblast, & Temple & Webster shares are pushing higher
• Today was mixed for the ASX 200, ending 0.1% higher
• These could be the next ASX stocks to unlock value by selling assets
• Beat low interest rates with these 2 ASX dividend shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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The Zoono Group Ltd (ASX: ZNO) share price has surged over 7% this week, highlighting positive investor sentiment. Just yesterday, the company updated the market with an announcement which, at one point, sent the Zoono share price nearly 15% higher to $1.63. This was followed by a slight retrace today with the company’s shares closing the week 7.38% higher at $1.60.

Let’s take a look at what Zoono does and why its shares have surged higher this week.

What does Zoono do?

Zoono is a global biotech company that develops, manufactures and distributes antimicrobial solutions. The company produces sprays, wipes and foams suited for skin care, surface sanitisation, and mould remediation treatments.

Zoono’s products have been designed to work on any surface, killing pathogens such as bacteria, viruses, algae, fungi and mould.

What’s moving the Zoono share price?

Investors have been driving the Zoono share price higher late this week after the company reported it received some positive test results from a series of independent laboratory tests in the United Kingdom.

The first number of trials was conducted on passenger trains servicing UK Rail. In total, 72 ‘hot’ touch areas were tested across 23 trains for any presence of COVID-19, E.coli and staphylococcus. The ‘hot points’ within carriages and driver’s cabs had been treated with Zoono’s Microbe Shield between 8 and 30 days prior to testing.

The results were carried out by GTECH Strategies Limited in collaboration with an independent UKAS accredited test laboratory.

It found no detection of COVID-19 and E.coli in all 72 tests. However, 70 of 72 trials did not find staphylococcus, with 2 tests discovering an extremely low amount, being considered as ‘near sterile’.

In the United Arab Emirates, Dubai Central Laboratory also carried out efficacy and durability tests. The experiment used Zoono Microbe Shield on steel, glass, plastics, tile and carpet with the objective to destroy all pathogens. The results confirmed a 99.9% efficacy against staphylococcus and E.coli. However, when used on wood and rubber, the outcome achieved was above 90% at 30 days.

In addition, trials were completed at Intertek, a global laboratory operating under GLP (the OECD Principles of Good Laboratory Practice). Additionally, Zoono Microbe Shield was found effective against E.coli, Pseudomonas, Staphylococcus, Enterococcus, Listeria and Salmonella.

Other developments

In other positive developments for the Zoono share price, the company advised it has commissioned tests of its alcohol-free hand sanitiser, GermFree24. The study for the hygienic hand rub was carried out in Poland by Lab-Test Laboratorium S.C.

Zoono said that all its products have been backed by over 100 laboratories worldwide proving their efficacy against pathogens. Furthermore, the company said it has helped protect communities from risk of infection through its products being used across buildings, vehicles, aircrafts, homes and hospitals.

More reading

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. 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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The S&P/ASX 200 Index (ASX: XJO) has finished down by 0.6% to 5,930 points.

Here are some of the highlights from the ASX today:

AMP Limited (ASX: AMP)

The AMP share price went crazy today, rising around 20% as investors learned of a potential takeover offer.

The ASX 200 company confirmed today that it has received an indicative, non-binding, conditional proposal from Ares Management Corporation to acquire 100% of the shares in AMP.

However, AMP said that the proposal was at a very preliminary stage and warned that there is no certainty that a transaction will eventuate. AMP continues to progress its portfolio review whilst pursuing its three-year transformation strategy.

According to reporting by the Australian Financial Review, the offer is supposedly more than $5 billion.

Western Areas Ltd (ASX: WSA)

The Western Areas share price dropped 17.7% today after the miner downgraded its FY21 production guidance and increased its unit cash cost of production.

The ASX 200 miner’s original production guidance was 19,000 tonnes to 21,000 tonnes of nickel. However, that production guidance has been reduced to 17,000 tonnes to 19,000 tonnes.

It also said that its unit cash cost of production has worsened. Originally it was guidance of a range of A$3.25 per pound to A$3.75 per pound, but the guidance has worsened to a range of A$3.50 per pound to A$4 per pound.

However, the guidance for mine development, capital growth, the Odysseus development and exploration is unchanged.

Western Areas said that the guidance change is due to the inclusion of increased lower grade ore in FY21, following some isolated seismicity encountered in the lower T6 zone of the Flying Fox mine.

Western Areas managing director Dan Lougher said: “Flying Fox has been an exceptional mine over its 15 year life to date, but unfortunately, as it enters its final years there is limited flexibility in the mine plan when unexpected issues occur. While it is disappointing to lower our guidance expectations for FY21, we are continuing to work with our mining contract to reduce operating costs and maximise cashflow generation over Flying Fox’s remaining life.”

Sezzle Inc (ASX: SZL)

Buy now, pay later business Sezzle has released its update for the three months to 30 September 2020.

Sezzle reported that its underlying merchant sales (UMS) grew 231.5% year on year to US$228.2 million. The average monthly UMS went up 231.5% as well to US$76.1 million.  This helped Sezzle’s merchant fees go up by 260.6% year on year to US$13 million. Merchant fees as a percentage of UMS grew by 46 basis points to 5.7%.

The company reported that its active consumers rose 178.1% to 1.79 million. Active merchants grew by 178.3% to 20,890. The active consumer repeat usage percentage rose by 748 basis points to 89%.

Sezzle nearly achieved its annualised run rate goal of US$1 billion of UMS in the quarter, with a run-rate of US$986 million.

The CEO of Sezzle, Charlie Youakin, said: “We are extremely proud of our team and what they have accomplished in 2020, but we are not done. Our product initiatives are merchant pipeline have never been better and the current quarter has gotten off to a solid start. We believe we are well-positioned, as we head into our strongest seasonal months of November and December.”

The Sezzle share price initially went up to $7.08, but it ended lower by 4.5%.

More reading

• Here’s why ASX cannabis shares are falling today
• Investors rejoice as AMP (ASX:AMP) share price rockets 20% on takeover
• Why Western Areas (ASX:WSA) share price is falling off a cliff today
• It’s not just Aussie Millennials driving the Afterpay (ASX:APT) share price to new records
• Why AMP, Fortescue, JB Hi-FI, & ResMed shares are charging higher

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia has recommended Sezzle Inc. 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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Aged care provider Japara Healthcare Ltd (ASX: JHC) has announced a loss of $292 million at its AGM this afternoon. The Japara share price is slightly up at the time of writing by 2.63% to 39 cents on light trading volume.

Highlights from Japara’s AGM this afternoon:

• The company says COVID-19 severely affected its business in the second half of FY20
• Although revenue was up by 7%, it reported net loss after tax of $292.1 million, compared to $16 million profit last year.
• The bulk of the loss is due to a one-off non-cash impairment of $292 million made in May.
• The 7% revenue increase was not due to more occupants, but rather from a government grant to help aged care providers. 
• Occupancy as at 25 October was at 87.6% reflecting the highest in the industry. 
• The company appointed new CEO Chris Price this year after Andrew Sudholz retired.
• No further property developments will commence until the outlook improves. 
• Earnings guidance for FY21 will not be released due to uncertain conditions ahead.

What does Japara Healthcare do?

Japara Healthcare owns, operates, and develops aged care facilities. One of Australia’s largest aged care providers, Japara has more around 4,000 people in its care, and more than 6,000 staff caring for them. The company’s aged care portfolio comprises 50 homes across five states.

Outlook for Japara after today’s AGM

CEO Chris Price mentioned during the AGM that Australia has a growing elderly population, a result of people living longer and the significant increase in births during the post-war era. As such, a large volume of aged care residences will have to be built over the next 10 years. 

However in the short term, the business operates in a precarious sector in which the elderly remain the most vulnerable group during the pandemic. As a result, short-term expenses are expected to rise as the company spends on protective equipment, cleaning staff, as well as staff training. 

Mr Price is counting on the Federal Government to provide not only guidance, but also the funding necessary to sustain the sector in the short term. He said:

Japara looks forward to the release of the final report from the Royal Commission into Aged Care Quality and Safety in February 2021 which we hope will provide the much needed direction, confidence and support for the sector, including recommendations as to appropriate funding to provide high quality care. 

How did Japara’s share price perform in 2020?

Japara’s share price has lost more than 60% YTD in a year headlined by coronavirus deaths at aged care facilities across Australia. As a comparison, the ASX Health Care Sector Index (ASX: XHJ) shows an increase of 6% YTD. At today’s valuation of 39 cents, Japara commands a market capitalisation of $105 million.

More reading

• Why the Carsales (ASX:CAR) share price dropped 4% today
• Here’s why ASX cannabis shares are falling today
• RBA will cut rates Tuesday, say 67% of experts
• Why the Medical Developments International (ASX:MVP) share price is tumbling lower
• Investors rejoice as AMP (ASX:AMP) share price rockets 20% on takeover

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. 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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The Carsales.Com Ltd (ASX: CAR) share price was out of form on Friday and dropped notably lower.

The online auto listings company’s shares fell 4% to $20.77.

Why did the Carsales share price drop lower?

Today’s decline appears to have been driven by the release of the company’s annual general meeting presentation this morning.

At the meeting, Managing Director and CEO, Cameron McIntyre, spoke about FY 2021 and his expectations for the new financial year.

He commented: “The world is clearly an uncertain place at the moment to say the least but where our focus is going to be coming into FY21 will be around managing our costs and investing in product and our market positions.”

“We expect to continue benefiting from the resilience of the used car market, and the trends we have been observing should support this. We are well funded with low gearing, strong liquidity and cashflows that will continue to fund growth and dividends,” he added.

How are Carsales’ businesses performing?

The presentation also included an update on how different areas of its business are performing in FY 2021.

The release explains that overall lead volumes in the first quarter of FY 2021 have been impacted by the closure of dealerships in Metro Melbourne.

However, excluding Metro Melbourne, management notes that its overall lead volumes grew strongly on the prior corresponding period.

In addition, Carsales has provided a 100% rebate for all metro Melbourne dealers since 6 August. It will continue to do so until dealers’ retail offerings reopen.

It estimates that this support has cost ~$12 million to date in FY 2021. This brings the total support provided to dealers since the start of the pandemic to approximately $40 million.

Over in South Korea, the company is observing key operating metrics of inventory, listing volumes, and traffic all growing well. This is reinforcing continued good growth in revenue and EBITDA over the prior corresponding period.

But given the continuing uncertainty due to COVID-19, Carsales isn’t providing specific guidance on its financial expectations for FY 2021 at this stage.

More reading

• Why Bigtincan, Bubs, Carsales, & Western Areas are dropping lower
• 5 things to watch on the ASX 200 next week
• Top ASX tech shares to buy in October 2020
• Why the Carsales.com (ASX:CAR) share price just zoomed to a record high
• Meet the latest ASX small cap stock that’s racing ahead during COVID

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The S&P/ASX 200 Index (ASX: XJO) has had a pretty flat day today to cap off the week. By the market close, the ASX 200 had fallen 0.69% to 5,928.2 points. However, one sector fell a lot worse today than the broader market, a sector with a green tinge to it. Yes, I’m talking about ASX cannabis shares.

By the end of the day, Cann Group Ltd (ASX: CAN) led the falls, down 4.69% to 3.05 cents per share.

THC Global Group Ltd (ASX: THC) wasn’t far behind with a 4.17% slide to 23 cents a share.

Elixinol Global Ltd (ASX: EXL) was also feeling the pain, down 3.33% to 14.5 cents per share.

And Althea Group Holdings Ltd (ASX: AGH) was 2.27% lower at 43 cents a share.

So what was giving the market red eyes today in this space? Far from the, um, highs of a few years ago, today seems to be giving investors another ounce of regret.

NZ referendum induces investor paranoia

We can probably put today’s negative moves in the cannabis sector down to the newly released results from the referendum that New Zealand held recently to legalise recreational cannabis use. The referendum was held at the same time as the New Zealand parliamentary elections a fortnight ago (in which the Labour Party’s Jacinda Ardern won a landslide victory and a rare majority government), but results are only being released today.

According to reporting from the aptly-named Vice.com, the New Zealand cannabis referendum was not successful, with the preliminary count showing 53.5% opposing legalisation. The reporting suggests that unless late vote counting heavily favours the ‘Yes’ column, the prospects of legalised marijuana in New Zealand are up in smoke, at least for now. It doesn’t look like there will be a purple haze of celebration across New Zealand tonight.

On a side note, a separate referendum to legalise voluntary euthanasia has been successful.

What does this mean for ASX cannabis shares?

Well, this isn’t good news to be sure. A legalised market for recreational cannabis would have likely been a boon for companies like Cann Group and Althea Holdings. Not only would it have resulted in a potentially massive market just across the Tasman for cannabis products, but it would have also likely increased the pressure for Australian states to follow suit over the next few years. That prospect now looks a lot dimmer in light of this result.

And it’s not as though ASX cannabis investors could have used some good news either. Cann Group shares are today more than 90% below where they were back in early 2018. As are THC Global shares (more than 75% down from early 2018) and Althea (down over 60% since July 2019).

It looks as though ASX cannabis investors will have to wait a little longer to turn their current headaches into new highs.

More reading

• It’s not just Aussie Millennials driving the Afterpay (ASX:APT) share price to new records
• ASX 200 flat: ResMed smashes expectations, AMP surges on takeover talks
• Why the AMP (ASX:AMP) share price could be set to rocket higher today
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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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