MARKET REPORT: Ocado rollercoaster ride sends shares tumbling
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MARKET REPORT: Ocado roller coaster ride sends shares down 17% after a run that saw it more than double in value in less than five weeks
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Shares in Ocado plunged nearly 17 percent yesterday as the roller coaster ride continued.
Shares of the online retailer cum technology tumbled after a strong run that more than doubled in value in less than five weeks.
The slump left many City observers scratching their heads as analysts attributed it to profit-taking following the recent rally.
Ocado shares tumbled after a strong run that more than doubled in value in less than five weeks
But it was another day of turmoil for long-suffering shareholders and founder and boss Tim Steiner, whose 2.4 per cent stake is worth around £150 million.
Ocado shares rallied at the start of the pandemic on surging demand for online grocery delivery.
But after peaking at nearly 2,900 pence in late 2020, the stock switched hands for less than 400 pence just a month ago.
Shares were back above 900p on Monday as the recent deal to build automated warehouses for Lotte in South Korea continued to provide support.
But yesterday it was down 16.8 percent, or 155.4p, to 770.2p. “The recent rally in Ocado shares appears to have come to a shocking halt,” said Michael Hewson, chief market analyst at CMC Markets UK.
“Shares have surged in recent days after the Lotte deal was announced, so a pullback was long overdue.”
Aston Martin shares went off track after analysts warned it may still need to raise fresh cash even after a summer cash injection.
Jefferies said the FTSE 250 luxury car maker has sustained its business but is still at least two years away from implementing a “viable operating structure.”
Concerned about sales volumes and size, Jefferies downgraded its rating from “hold” to “underperform” and lowered its target price from 530 pence to 120 pence.
Even worse, it said that in a “downside scenario” the stock could fall as low as 40p. Shares fell 7 percent, or 9.95 pence, to 133.1 pence.
Aston Martin, a James Bond favourite, raised new funds this summer, leading the Saudis to take an 18.7 percent stake, making them the second-largest shareholder after executive chairman Lawrence Stroll.
The FTSE 100 fell 0.21 percent, or 15.73 points, to 7369.44 and the FTSE 250 fell 0.85 percent, or 166.37 points, to 19,455.88.
Imperial Brands counted the cost of withdrawing from Russia after profits and revenues took a hit.
The cigarette maker, which withdrew from Russia in April following Vladimir Putin’s invasion of Ukraine, saw its profits fall to £2.6bn from £3.2bn in the year to September.
Sales fell 0.7 percent to £32.6 billion. Imperial Brands sold its Volgograd factory in April, adding that its loss on departure from Russia was £364 million.
Shares fell 0.5 percent, or 11p, to 2027p. Energy company Drax won 3 percent, or 16.5 pence, to 564 pence after a vote of confidence from a City broker.
RBC reiterated its “outperform” rating, saying it viewed Drax’s recent stock price slump as “misguided.”
The broker said that while a further windfall tax increase could mean Drax would pay an extra £1.5bn over five years, the government could choose to be more lenient on renewable electricity generators.
British Gas owner Centrica was also on the rise, up 3.4 percent, or 2.82p, to 86.28p.
Asset manager Ninety One collapsed on the back of a cocktail of economic woes.
The group said it was going through a rough patch amid rising inflation, rising interest rates, the war in Ukraine and a fall in financial asset prices.
Assets under management fell 8% to £132.3 billion in the six months to September, with clients drawing £3.2 billion from the group’s funds over that period.
Profits fell 16 percent to £110.6 million. Shares fell 4.9 percent, or 10.8 pence, to 209.2 pence.