After share price falls, ASOS, Boohoo and THG see partial recoveries
Weak results and news that a takeover wasn't going to be happening sent shares of ASOS, Boohoo and THG down sharply on Thursday. But it appears you can't quite keep a good company down and the share prices began to recover on the London Stock Exchange on Friday.
ASOS for instance, on Thursday had reported overall sales growth in the latest quarter but warned its profits would be crimped as it's been seeing a much higher rate of returns. This sent its share price plummeting, falling by nearly a third.
Yet a lot of investors clearly see the company as a bargain at its lower price and started to buy the shares on Friday, which means they were up 8% by mid morning. They clearly still have a long way to go to get back to where they were at the beginning of the week, however and the company will be under heavy investor pressure to improve its performance under its newly-appointed CEO.
As we write, the share price of around £8.40 a time gives the company a market capitalisation of £843 million. Around four years ago, the share traded at over £76 each.
Meanwhile, Boohoo also suffered on Thursday, partly due to the general anti-fast-fashion sentiment in the market, but also because it reported a rare occurrence of its own – a drop in its quarterly sales.
The share price fall wasn't as big as that for its online peer, but it still fell around 12%.
And its Friday climb was also more modest than that of ASOS with an almost-5% uplift. This means the company's shares are trading at a little over 60p each and it has a market capitalisation of £766.5 million. That’s well short of just two years ago when he shares fetched over £4 each.
Finally, THG shares also fell on Thursday as investors learned that a buyout of the company wouldn't be happening any time soon. THG issued a statement saying it had received various approaches but that they significantly undervalued it.
This caused the shares to fall by almost 20%. However again, Friday saw much more positive sentiment towards the firm and its share price began to rise again. By mid-morning it was up almost 10% at almost 82p a share.
This gives it a market capitalisation of just over £1 billion. And while that sounds impressive, we have to remember that the share price was around £8 a time when the company first listed on the stock exchange less than 18 months ago.
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