Volatility on the E-Commerce Index shows no signs of easing, with online retail being hammered on the ASX.
With Australia reopening and supply chain issues causing havoc, the ASX Listed E-Com Index was volatile enough already. But as we head further into 2022, it’s clear we hadn’t yet bottomed….even when there were questions over how much lower share prices could possibly go. A war in Ukraine, further supply chain dramas with lockdowns in China, interest rate rises and a looming election….investor panic seems to be on the rise.
After Kogan and Booktopia were savaged on the ASX last week, some commentators (it was me…I was some commentators) thought that there may be a distancing between e-commerce companies rather than poor performance or leadership reshuffling bringing the whole index down. Anyway, some commentators were wrong. Over the last fortnight, the E-Com Index has lost 25.1%, severely underperforming compared to the ASX200 which is down 3.8% over the same time period. Looking at a longer term comparison, the ASX Listed E-Commerce Index has lost a massive 52.6% over 90 days. with the ASX200 down just 0.5% in the same period.
The worst performer in that three month period is Cettire, down an enormous 82.1% to $0.54 at close on Tuesday. It’s…eye-watering.
Source: Performance based on ASX reporting for the period
Looking at shorter term however, the results may surprise. In the last week, Adore Beauty is down 17.4% to $1.40, making it the worst performer on the Index for this period. Following closely behind (or in front?) is Temple & Webster, down 16.9% to $4.49 on Tuesday. Both companies experienced a slight uplift in a 24 hour period, but not enough to salvage their performance over seven days. Booktopia, while experiencing a massive drop after announcing CEO Tony Nash would be stepping aside, and reporting its Q3 results, has only dropped 11.1% over the last seven days. While its longer term performance reflects the market response to its announcement (down 67.7% over 90 days), it shows there has been some levelling out. Similarly, the market response to Kogan’s Q3 results was swift (down 45.5% over three months to $3.50), however in the last seven days, it has also steadied somewhat (down just 6.2%). Redbubble was the best performer over this period, down 5.5%.
While we did see signs of correction earlier in the year, this trajectory is well and truly off the table for now. It looks like we should buckle in, as investors turn away from tech and e-commerce stocks. As online retailers put in place strategies for growth and retention and ways to ride out supply chain and inventory challenges, it’s clear that this will be a long-game. The question is, are investors still playing?
Figures are current as at close of ASX on 10 May 2022. This is analysis only and not intended as investment advice.
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