THINKING OUT LOUD

Tuning In To Adverse Price Movements

21 October 2019

by Rob Zdravevski

I don’t closely follow Treasury Wines (TWE:ASX) anymore though observing the stock fall from $19 to $16.40 (14%) or equivalent to losing approx. $1.4 billion in market, because its CEO is resigning, seems like an extraordinary over reaction.
 
I mean, the company does $2.8 billion in revenue and one person resigning just wiped out 15% of the company’s worth, and equal to 50% of the year’s sales……
 
Of course, the analysis required should be deeper than this. For example, was the stock overvalued prior to this announcement and a host of other scenarios and questions should be asked.
 
But nevertheless, adverse moves are sometimes worth digging deeper into the real cause or attributable value of the action.

Latest

The question of solvency

8 April, 2020 by Rob Zdravevski...

READ MORE