How low can we go? ASX E-Com has taken a thrashing over the last few months. Are we set for a rebound or is there still room to fall?
The ASX Listed E-Com Index is severely underperforming compared to the ASX200. The Index has lost a massive 43.9% over 90 days, compared to the ASX200 which shed just 1.1%.
While it’s not a particularly rosy picture for any of the companies on the e-com index, it looks like Cettire is the biggest contributor when it comes to pulling the Index down. It has shed a massive 77% over 90 days, down to $0.78 as at close of ASX on Tuesday, down from $3.25 in late January. While it was already on a downwards trajectory, its announcement that Founder and CEO Dean Mintz had agreed to sell down 35 million shares in the company (representing 9.18% of the Company’s issued capital and pocketing over $47 million) didn’t exactly do the share price any favours.
But it’s obviously not just Cettire that’s to blame for e-com’s poor performance. In the same 90 day period, Adore Beauty is down over 60% (to $1.64) and Bike Exchange is down a massive 68.2% (to $0.05). MyDeal was the best performer over the three month period, down just 13.5%. Booktopia dropped 44.4% with Redbubble shedding 48.8%. Kogan and Temple & Webster performed similarly, down 34% and 32.7%, respectively.
Looking at the shorter term, however, some companies seem to be in more of a holding pattern rather than a steady path downwards. Booktopia, for example, is at 0% over seven days (opening at $0.72 this morning) and Temple & Webster is down just 3.9%. MyDeal is again the best performer, experiencing 7% growth to $0.61 in the last seven days. Cettire is again the worst performer, down 18.4% over the same seven day period.
Source: E-Com Index performance based on ASX reporting for the period
While there are clear reasons for this poor performance (inflationary pressures, shifting consumer behaviour as we return to covid-normal, election upheaval, the situation in Ukraine, supply chain pressures…just to name a few), e-commerce has been positioned in the tech space, which has borne the brunt of volatility on the ASX in the last few months. This means that when we’ve seen shares like Zip be pummelled, online retail has similarly suffered. It’s unlikely tech or online retail shares have bottomed (I mean, we’ve signs before…but were proven wrong). Though how much further can they fall? (Rhetorical question….obviously.)
While investor sentiment towards some companies like Cettire is based on recent announcements or concerns over the viability of their business model, other companies are struggling based on factors completely outside their control. While not altogether unexpected, some companies will come out of this period far stronger, while others will get left behind. Looking at which companies fall into which category, the signs are already there.
Figures are current as at close of ASX on 26 April 2022. This is analysis only and not intended as investment advice.
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