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Mike Cannon-Brookes has upped his holding in AGL Energy Limited (ASX: AGL)’s shares to 11.28% and plans to put that muscle to work in blocking the company’s planned demerger.

AGL’s newly minted largest shareholder announced his position last night, saying the “flawed demerger … makes no sense, or cents”.

The S&P/ASX 200 Index (ASX: XJO) energy producer and retailer’s board has hit back, responding to Cannon-Brookes’ stance this morning. It said it’s still confident the demerger is in the best interest of shareholders.

At the time of writing, the AGL share price is $8.34, 3.31% lower than its previous close.

Let’s take a look at what all this could mean for the 185-year-old company’s future.

AGL share price slips as Cannon-Brookes ups the ante

The AGL share price is in the red on Tuesday. Its slide comes as the company responds to Cannon-Brookes’ latest attempt to block its planned demerger.

According to Cannon-Brookes, his private investment vehicle, Grok Ventures is now AGL’s largest shareholder.

And the venture has not only committed to voting the stake against AGL’s demerger. It’s also working to convince other shareholders to vote ‘no’ at AGL’s upcoming scheme meeting.

Grok Ventures operates the Keep it together Australia campaign, which argues against the split.

The demerger would see AGL Energy split into energy generating business, Accel Energy, and energy retailer, AGL Australia.

A media release, published by Keep it together Australia, notes:

Grok firmly believes the demerger will create two weaker, interdependent companies with significant operating risk and dis-synergies.

Grok suggests Accel Energy will not be able to fund its transition or meet its liabilities due to high leverage, thermal coal exposure, significant remediation costs and a reduced appetite for coal exposure from equity and debt investors.

“[AGL] has had a proud history of leaning into the future, innovation, and embracing the latest in technology,” Cannon-Brookes tweeted last night.

“However, AGL is also Australia’s single largest emitter of carbon, at over 40mt. Alone it emits more CO2 than the entire countries of Sweden, Portugal, Ireland, or New Zealand.”

Cannon-Brookes also commented on Keep it together Australia’s release, saying:

By not transitioning fast enough away from fossil fuels, the board has presided over AGL’s value plummeting to the tune of almost 70% in five years.

We intend to vote every AGL share we control at the relevant time against the demerger, and we call on fellow AGL shareholders to vote against the demerger to avoid further value destruction.

AGL board claps back

The energy producer and retailer’s board responded in an ASX release this morning.

It said the demerger could help maximise growth by providing each business its own “freedom”, with separate dividend policies, capital structures, and future values.

“AGL remains committed to progressing the proposed demerger with a view to achieving implementation by 30 June 2022 and a responsible transition of Australia’s energy system,” the board stated.

As The Motley Fool Australia’s Tristan Harrison reported earlier today, AGL’s demerger needs the support of 75% of shareholders.

Assuming Cannon-Brookes’ stake will slide into the ‘no’ box, the demerger decision lies with the voting power of 13.72% of AGL’s shares.

That’s not the only news that could be moving the AGL share price on Tuesday. The company announced a $2 billion renewable energy deal this morning.

The deal could see Accel Energy managing a 2.7 gigawatt renewable energy pipeline. It’s subject to the demerger’s completion.

The post Own AGL shares? Here’s why the company’s demerger could be dead in the water appeared first on The Motley Fool Australia.

More reading

• AGL share price in focus amid Cannon-Brookes raid
• ASX 200 midday update: NAB’s AUSTRAC update, AGL downgrades guidance, Qantas takes off
• AGL share price tumbles on earnings guidance downgrade
• How much is the AGL dividend payout ratio?
• Why is the AGL share price outperforming today?

Motley Fool contributor Brooke Cooper 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 Atlassian and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Strike Energy Ltd (ASX: STX) share price is surging higher, up 4.8% after earlier posting gains of more than 9%.

Here’s what’s driving investor interest in the ASX oil and gas explorer and developer.

What field test results were announced?

The Strike Energy share price is leaping higher after the company reported on promising final flow testing results at its Walyering Gas Field, located in the Perth Basin in Western Australia.

Strike Energy is the operator and owns a 55% equity interest in the gas field, while Talon Energy Ltd (ASX: TPD) holds a 45% equity interest. Talon Energy shares are up 11% at time of writing.

According to this morning’s release, after 21 days of testing, the results at its Walyering-5 well have “materially outperformed expectations.”

In fact, the Walyering comingled flow test achieved the 3rd highest flow rate in Basin history. For the technically minded, the explorer reported this came in “at a choke coefficient of 75 mmscfd on 72/64 choke with FWHP of 2,599 psi”.

Individual testing of the Walyering-5 well’s A and B Sands has now been completed.

And the Strike Energy share price could be getting a lift from the report that the gas analysed from the A and B sands was found to be high quality with negligible impurities and condensate gas ratios.

Commenting on the positive test results, Strike Energy’s CEO, Stuart Nicholls said:

The outcomes of the Walyering-5 flow test have exceeded Strike’s most bullish estimates. The strength of the reservoir pressure, high quality gas stream and adjacency of gas transmission infrastructure will all come together to create some of the lowest cost gas to be developed in Australia for many years.

Strike Energy is currently drilling the Walyering-6 well at a measured depth of 2,130 metres.

Strike Energy share price snapshot

The Strike Energy share price has been a star performer in 2022, up 56.8% since the opening bell on 4 January. By comparison, the All Ordinaries Index (ASX: XAO) has lost 3.8% year to date.

The post Here’s why the Strike Energy share price is leaping 5% today appeared first on The Motley Fool Australia.

More reading

• Why did the Strike Energy share price power higher today?

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 no position in any of the stocks mentioned. 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 CSL Limited (ASX: CSL) share price was a relatively positive performer in April.

During the month, the biotherapeutics giant’s shares rose a touch short of 2%.

This compares favourably to a disappointing 0.9% decline by the benchmark ASX 200 index over the same period.

Why did the CSL share price beat the market last month?

The key to the CSL share price strength last month appears to have been improving plasma collection industry data and the release of a number of positive broker notes.

In respect to the latter, analysts at Citi, Macquarie, and Morgan Stanley all reiterated the equivalent of buy ratings on the company’s shares last month with price targets meaningfully higher than current levels.

What was said?

While all three brokers spoke very positively about CSL, the most bullish broker in the group was arguably Citi with its buy rating and $335.00 price target on its shares.

Based on the current CSL share price of $275.20, this implies potential upside of 22% for investors over the next 12 months.

Citi’s analysts believe that the company’s shares could be due for a re-rating to higher multiples in the coming months. This is expected to be supported by ongoing improvements in plasma collections and the impending acquisition of Swiss biotech giant Vifor Pharma.

Citi commented: “Over the next six months, we expect the market to focus on the strong underlying plasma market demand, and the closure the Vifor deal, both of which should lead to strength in the share price. Maintain Buy. A$335 TP.”

All in all, the broker appears to believe that now could be an opportune time for investors to snap up shares in one of Australia’s highest quality companies.

The post Here’s why the CSL share price beat the market in April appeared first on The Motley Fool Australia.

More reading

• 2 highly rated blue chip ASX 200 shares brokers rate as buys
• Is the CSL share price a bargain heading into May?
• Here’s what the 5 biggest companies on the ASX 200 today were worth in 2000
• How does the CSL dividend compare to its competitors?
• Analysts name 2 of the best blue chip ASX 200 shares to buy now

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro 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 CSL Ltd. The Motley Fool Australia has recommended Macquarie Group 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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The Aussie Broadband Ltd (ASX: ABB) share price soared during early morning trade before making a quick reversal.

This came after the broadband company provided a further announcement to the market regarding its third quarter trading update. 

At one point, Aussie Broadband shares rose as high as $4.60. But since then, investors have driven the price down to $4.17, up 4.25%.

What did Aussie Broadband announce?

In a statement to the ASX, Aussie Broadband advised that the trading update figures excluded the ‘Over the Wire’ (OTW) business.

The company welcomed the OTW team after completing the acquisition on 15 March 2022.

However, the accounts are still being finalised.

Aussie Broadband purchased 100% of the shareholding in OTW for an implied value of $5.75 apiece. This was either comprised of a $5.75 cash offer, 1.150 ABB shares, or a combination of both.

The total consideration of the deal stood at $344 million with an implied enterprise value of $390.4 million.

Aussie Broadband stated that it remains confident that both two companies will be earnings per share (EPS) accretive on a proforma statutory FY21 basis.

Management is targeting annual cost synergies of between $8 to $12 million within the next three years.

Although with the integration of the two companies already commenced, early synergy wins have so far been achieved.

Aussie Broadband noted that it moved a significant portion of its voice traffic onto the OTW tier 1 voice network. This resulted in roughly “$3 million of annualised EBITDA synergies being actioned.”

Once the accounts are completed, OTW is expected to deliver around $11 million in EBITDA (before transaction costs) for the 3.5 months owned under the Aussie Broadband banner.

When including the contribution from OTW, the company is forecasting full year EBITDA (before transaction costs) to be in the range of $38 million to $39 million.

Aussie Broadband share price snapshot

After falling 28% yesterday, the Aussie Broadband share price has made a remarkable turnaround.

Over the past 12 months, the company’s shares have risen by more than 32%, but year to date is down 15%.

Aussie Broadband has a price-to-earnings (P/E) ratio of 52.08 and commands a market capitalisation of roughly $1.32 billion.

The post Aussie Broadband share price stages partial recovery on ‘further market update’ appeared first on The Motley Fool Australia.

More reading

• Why Appen, Aussie Broadband, IGO, and Kogan shares are sinking today
• Here’s why the Aussie Broadband share price is crashing 25% today
• Best ASX shares to buy in May 2022
• 3 ASX All Ordinaries shares rocking all-time highs today

Motley Fool contributor Aaron Teboneras 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.

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Looking at the S&P/ASX 200 Index (ASX: XJO) shares the professionals are buying and selling during these volatile times have yielded a few surprises.

Local fund managers have been shying away from ASX banks ahead of the RBA’s interest rate decision today.

That’s the finding reported in JP Morgan’s Fund Manager Radar report, which noted a 63-basis point (bp) decline in bank holdings among domestic institutions.

ASX 200 shares facing a bank run

That decline is the largest among this cohort since the March quarter of 2020. It was two ASX big bank shares in particular that were being dumped.

These were the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price and Westpac Banking Corp (ASX: WBC) share price. Holdings of ANZ Bank shares among local fundies plunged 111 bps while Westpac tumbled 160 bps.

One ASX bank bucking the trend

But Australian fundies weren’t shunning all ASX 200 bank shares. In fact, there the National Australia Bank Ltd. (ASX: NAB) share price seemed to have found favour with the group.

“Over the past year, WBC has seen the largest scaling back by domestic instos (-320bp), with NAB being the only gainer (+40bp),” said JPMorgan.

“This lines up with our Love Index that shows only NAB in [the] ‘well-held’ [category], with all the other majors now in ‘under-held’.”

The ASX sectors professionals are buying into

The Love Index looks at the top 10 holdings of ASX 200 shares to determine which names are favoured by professional investors in the quarter and which aren’t.

While these investors have lightened their load on financial shares, they have been increasing their exposure to defensive and energy shares.

JPMorgan noted that allocation to defensives now stands at a five-year high. The weighting to energy has increased for the fourth consecutive month.

“March saw our universe of managers continue their shift to a more defensive footing (+10bp),” said JPMorgan.

“This marks a continuation of the pivot that started mid-last year, with the 1-year lift in defensive holdings approaching 70bp.”

ASX 200 shares fund managers are buying and dumping

There are three ASX 200 shares that have moved up into the “well-held” category on the Love Index in the latest quarter.

They include the Telstra Corporation Ltd (ASX: TLS) share price, Woodside Petroleum Limited (ASX: WPL) share price and South32 Ltd (ASX: S32) share price.

Meanwhile, ASX 200 shares that have fallen into “underheld” territory include the Woolworths Group Ltd (ASX: WOW) share price, Newcrest Mining Ltd (ASX: NCM) share price and ANZ Bank share price.

The post The ASX 200 shares that fund managers are buying and dumping appeared first on The Motley Fool Australia.

More reading

• Woolworths share price on watch amid strong Q3 sales growth
• 5 things to watch on the ASX 200 on Tuesday
• Own ANZ shares? Here’s what to expect from the bank’s half-year results
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Can ASX 200 banks live up to the $11 billion ‘big expectation’ when they report this month?

Motley Fool contributor Brendon Lau has positions in Australia & New Zealand Banking Group Limited, National Australia Bank Limited, Newcrest Mining Limited, South32 Ltd, Telstra Corporation Limited, and Westpac Banking Corporation. 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 positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. 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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After a strong performance through most of 2022, BHP Group Ltd (ASX: BHP) has had a bit of a tough run over the past 2 weeks.

At market open this morning, the BHP share price is down 10% from Tuesday, 19 April, having closed yesterday at $47.98.

The other S&P/ASX 200 Index (ASX: XJO) mining giants have struggled over the past 10 trading days as well, though not quite as much.

The Rio Tinto Limited (ASX: RIO) share price, for example, is down 7.3% over the 2 weeks while Fortescue Metals Group Limited (ASX: FMG) shares have dropped a more modest 1.7%.

A common headwind hitting BHP shares along with Rio Tinto and Fortescue has been the slipping iron ore price, with fears that Chinese demand for the industrial metal could fall amid its reduced economic growth outlook.

Last week, iron ore fell 8.5% before regaining 5.4% over the past few days.

And according to Jess Amir, Australian market strategist at Saxo Bank, demand for iron ore looks set to rebound, which should help support the recovery in the BHP share price and the other top ASX 200 iron ore stocks.

World’s top 2 economies to splash cash on infrastructure

Iron ore is a key ingredient in steel production. And steel, in turn, is vital in the construction of buildings, bridges, roads, and most every type of infrastructure project.

Hence, when the world’s 2 biggest economies are planning major ramp ups in infrastructure spending, demand for iron ore should increase.

According to Amir:

Iron ore buying is expected to ramp up not only because of Chinese President Xi’s calls for ‘all-out efforts’ to boost infrastructure construction like it did in 2007-2008, but also as US President Biden’s $1.2 trillion infrastructure bill will be put to work.

Turning to the slumping BHP share price and the recent declines in Fortescue and Rio Tinto, Amir said, “This supports recoveries in BHP, Fortescue, and Rio still trading lower than 2-week highs.”

Amir also points to the juicy dividend yields offered by the ASX 200 miners, alongside their modest price to earnings (P/E) levels:

These three stocks offer the highest dividend yields in the market, and are far above the average 2.8% yield.

BHP has a yield of 10%, Rio Tinto 9.6%, and Fortescue 13.7%. BHP trades on 10.68 times earnings, Rio on 6.09 times earnings and Fortescue on 5.2 times earnings. And they all have free-cash flows, unlike most growth and tech stocks.

BHP share price snapshot

Although the miner has lost ground over the past 2 weeks, the BHP share price remains up 12.8% so far in 2022. That compares to a year-to-date loss of 3.5% posted by the ASX 200.

The post The BHP share price has lost 10% in 2 weeks. Here’s why this expert is tipping a recovery appeared first on The Motley Fool Australia.

More reading

• What’s the outlook for ASX 200 mining shares in May?
• April hasn’t been kind to the BHP share price. Here’s what went down
• ASX 200 mining shares just had their best trading day in 5 weeks. What’s next?
• Down over 10% in 10 days: Is the BHP share price a bargain buy now?
• Cash generation among ASX 200 iron ore shares will ‘be significant’ in 2022: expert

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 no position in any of the stocks mentioned. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened 

After a rough week, cryptocurrency assets are on the mend on Monday morning. The calendar has turned over to a new month and the stock market is up slightly with crypto assets climbing as well. Investors seem to be moving back into riskier assets and that’s broadly helping the cryptocurrency market slightly. 

From its low on Sunday to early Monday, Bitcoin (CRYPTO: BTC) was up as much as 3.1% and the value had jumped 4.2% from Saturday’s lows. Ethereum (CRYPTO: ETH) was up 3.9% from lows Sunday to highs early on Monday. Crypto exchange Coinbase Global (NASDAQ: COIN) was up as much as 8.5% in trading Monday and is up 6.9% as of 1 p.m. ET. 

So what 

Over the weekend, Berkshire Hathaway CEO Warren Buffett poured cold water on the cryptocurrency market once again, saying he wouldn’t pay $25 for all of the Bitcoin in the world. This is a long-running criticism from Buffett, who isn’t known as a bleeding-edge investor in technology companies. And with cryptocurrencies being so new and unproven in the financial markets it’s not surprising to hear more negative comments from Omaha. 

At Coinbase, over the weekend it was reported that the company has hired Durgesh Kaushik, formerly the head of Snap India, as senior director for market expansion. TechCrunch reported Kaushik helped grow Snap’s user base to about 130 million people in India and Coinbase doesn’t yet have a significant presence in the country.

One of the biggest opportunities for growth at Coinbase is international expansion. The exchange is popular in the U.S., but in the international market, it’s dwarfed by Binance and FTX. 

Now what 

Broadly, the cryptocurrency market has been very volatile so it’s no surprise to see the value of top cryptocurrencies and an exchange like Coinbase be volatile as well. But the market has been selling tech and growth stocks for months and these are the kind of assets that have been caught up in that, right or wrong. 

Over the next year, I think it will become clear how much of this sell-off has been foreshadowing a decline in cryptocurrencies overall and how much is a misunderstanding of crypto’s long-term potential. 

I think investors will see significant advancements for blockchains like Ethereum in scaling and lowering costs while companies like Coinbase continue to build out the infrastructure that traders and developers need. This will make the crypto market more accessible and innovative and with billions of dollars flowing into start-ups, it’s hard to tell where the industry will go from here. 

I wouldn’t take too much away from today’s trading as a result. It’s not clear if crypto and stock values have already hit bottom or if the market will drop further in the short term, but in the long term I think there’s a lot of value here for investors willing to hold on for the volatile ride. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Bitcoin, Ethereum, and Coinbase Jumped Today appeared first on The Motley Fool Australia.

More reading

• The top 2 cryptos of April unmasked
• What happened with the Bitcoin price in April?
• Why Shiba Inu, Ethereum, and Dogecoin are sinking today
• Crypto king Bitcoin to be dethroned by this hot rival: experts
• Bitcoin will be worth $590,000 by 2030: experts

Travis Hoium has positions in Berkshire Hathaway (B shares), Coinbase Global, Inc., Ethereum, and Snap Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares), Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns and has recommended bitcoin and Ethereum. The Motley Fool Australia has recommended Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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It has been a day to forget for the Booktopia Group Ltd (ASX: BKG) share price.

In morning trade, the online book retailer’s shares have crashed 26% to a record low of 46 cents.

This means the Booktopia share price is now down 67% since the start of the year.

Why is the Booktopia share price crashing today?

Investors have been selling down the Booktopia share price on Tuesday after the ecommerce company revealed the shock resignation of its CEO and that its performance has continued to deteriorate.

In respect to the former, Booktopia’s CEO and co-founder, Tony Nash, has informed the board of his intention to step aside. Though, he will continue as a full-time senior executive and director with the company in a new position focused exclusively on growth.

Mr Nash commented: “I look forward to continuing to find ways to grow the business while handing over the duties that come with being the CEO of a larger and listed entity. It’s time to hand over the leadership reins to someone who is more capable than me at that job description. I am genuinely looking forward to working with, and for, the new CEO.”

Booktopia has commenced a search to identify and secure a new CEO. Mr Nash will remain in the role until a replacement is appointed and then transition responsibilities to the new CEO.

Trading update

Also weighing on the Booktopia share price today has been an update on the company’s performance during the third quarter.

That update revealed that revenue for the quarter fell 1% over the prior corresponding period to $64.5 million. Management blamed this on the disrupted start to the academic year, resulting in lower overall revenue from academic book sales which have traditionally contributed strongly to third quarter performance.

Things were even worse for its earnings before interest, tax, depreciation and amortisation (EBITDA) in the third quarter. Booktopia’s EBITDA fell 65% to $1.5 million due to the combined impact of increased operating expenses and lower academic book sales.

Based on the above, the company’s revenue for the nine months to 31 March is now up just 9% to $194.7 million and its EBITDA is down 63% to $5.5 million.

Outlook… not so good

Unfortunately, things aren’t expected to improve in a hurry. In fact, they appear set to get worse before they hopefully get better.

For example, management has provided full year guidance of revenue of approximately $242 million and EBITDA of $3 million to $4 million. The latter means the company will be making an operating loss of $1.5 million to $2.5 million during the fourth quarter.

However, the company intends to address its lack of profitability by reassessing its cost base to ensure business costs and investments are more aligned with the company’s current growth trajectory. This will see the company aim to “create the step-change needed to reset the business thus allowing Booktopia to return to a sustainable level of growth and profitability as soon as possible.”

Judging by the Booktopia share price performance today, some investors aren’t sticking around to see if these initiatives are a success.

The post Booktopia share price crashes 26% on earnings dive and shock CEO exit appeared first on The Motley Fool Australia.

More reading

• Here are 2 ASX tech shares to buy according to brokers

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Booktopia Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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) was out of form during a very volatile April. The benchmark index lost 0.9% of its value during the month to end it at 7,435 points.

Although a good number of shares dropped with the market, some fell more than most. Here’s why these were the worst performers on the ASX 200 in April:

EML Payments Ltd (ASX: EML)

The EML Payments share price was the worst performer on the ASX 200 in April with a massive 47% decline. The catalyst for this was the release of the payments company’s trading update. During the third quarter, EML saw its net profit drop 22% on the prior corresponding period. This was driven by a poor performance from its European prepaid business and higher costs. And with management expecting the fourth quarter to be just as challenging, it was forced to downgrade its full year guidance.

Megaport Ltd (ASX: MP1)

The Megaport share price was sold off in April and sank 37.5% during the month. This was driven by weakness in the tech sector and the release of a disappointing third quarter update from the network as a service provider. In respect to the latter, for the three months ended 31 March, Megaport reported modest quarter on quarter revenue growth of 5% to $27.9 million. This was well short of the market’s expectations and led to consensus estimate downgrades.

Life360 Inc (ASX: 360)

The Life360 share price had a month to forget and sank 32% over the period. The majority of this decline came towards the end of the month following the release of the location technology company’s quarterly update. This was despite that update revealing a 129% increase in revenue to US$52.7 million and a 73% jump in annualised monthly revenue to US$166.1 million. Weaker than expected cash flows and news that Life360 is scrapping its US dual listing plans appeared to overshadow its strong top line growth.

Zip Co Ltd (ASX: ZIP)

The Zip share price continued its slide during April and dropped a further 26.2%. This means the Zip share price is now down 86% over the last 12 months. Investors were selling the buy now pay later provider’s shares after its third quarter update disappointed the market. This saw a number of brokers take an axe to their valuations. For example, the team at Jefferies retained their underperform rating and slashed their price target by 46% to $1.00.

The post These were the worst performing ASX 200 shares in April appeared first on The Motley Fool Australia.

More reading

• April was a disastrous month for the Zip share price. Here’s why
• If you’d bought $10,000 of Bendigo Bank shares 10 years ago, guess how much you’d have now
• 5 things to watch on the ASX 200 on Tuesday
• The CBA share price was the worst performer of the ASX 200 big banks in April. What happened?
• Why is the Webjet share price beating the ASX 200 today?

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended EML Payments, Life360, Inc., and MEGAPORT FPO. The Motley Fool Australia has positions in and has recommended EML Payments. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric-car leader Tesla (NASDAQ: TSLA) dropped more than 2% in early trading Monday, dragged down by a series of apparently bad news headlines. That’s the bad news.

The good news is that Tesla stock has already recovered its gains and is heading back higher as of 10:30 a.m. ET — on investors’ conclusion that the news isn’t really as bad as it first appeared.

So what

Let’s take these headlines one at a time.

Tic-tac-toe, three in a row, first Barron’s reported over the weekend on investor concerns that Tesla CEO Elon Musk’s deal to buy Twitter for $44 billion could leave Musk loaded with debt and at risk of having to sell more Tesla shares — with a deleterious effect upon Tesla’s stock price. Barron’s, however, believes Musk has the situation well in hand and, indeed, just last week Musk confirmed that he has “no further TSLA sales planned” after raising all the cash he needed through Thursday.  

That crisis averted, Tesla proceeded to spook investors further this morning when it filed an amended 10-K/A form with the Securities and Exchange Commission (SEC) advising that its “proxy statement for the 2022 annual meeting of stockholders” will be delayed a bit. But if all Tesla is doing is getting its financial ducks in a row preparatory to implementing a stock split — as it hinted it’s contemplating back in March — then a slight delay in the proxy statement might not be bad news at all.    

Last but not least, this morning we learned that lockdowns to combat the spread of the coronavirus in China have limited deliveries of electric cars by local automakers Nio, Li Auto, and XPeng to just 18,000 units — their worst showing in the past year. If Tesla finds its own production and deliveries crimped by these same factors, as could happen, then investors may be right to worry about Tesla missing its sales targets this quarter as well.  

Now what

But here’s the thing: Tesla just finished crushing on sales and earnings in its first-quarter earnings report, despite suffering three weeks of factory shutdowns because of the coronavirus in China. But with two other new Gigafactories (in Texas and in Germany) to pick up the slack, Tesla still expects to grow production 60% this year.

What’s more, even in Shanghai, Musk says his Gigafactory production is “coming back with a vengeance.” Over the weekend, Shanghai cautiously reported that it seems to have contained COVID-19 spread to within only the areas it has quarantined, with no new cases reported outside those areas for the first time since the outbreak began. And this opens up the possibility that Shanghai could add to Tesla’s production this year, not subtract from it.  

Once again, it appears that Tesla has dodged a bullet. Three of them, in fact. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock dropped, then popped on Monday appeared first on The Motley Fool Australia.

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Rich Smith 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 Nio Inc., Tesla, and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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