STOCK WATCH: MyDeal Soars, E-Com Index a Mixed Bag

Last Friday it was announced that Woolworths Group has proposed to acquire an 80% interest in MyDeal for a cash consideration of $1.05 a share. Sean Senvirtne will retain an 18.9% stake in the company (with Kate Dockery and Dean Ramler retaining 0.5% and 0.4% respectively) and stay on as CEO. MyDeal will, as such, be de-listed from the ASX. In response to the announcement, the MyDeal share price sky rocketed, up from $0.64 at close of ASX on 19 May to $1.01 at close on Tuesday, an enormous 65.6% gain over seven days. With companies experiencing mega-growth over the last few years yet being pummelled on the ASX, one has to wonder whether we’ll see other takeovers and delistings in the near future.

Speaking of things we said may happen in the future, after Tony Nash announced he would be stepping aside as CEO, we flagged that we wouldn’t be surprised to see further management shake ups within other ASX listed e-commerce companies. Last week, Bike Exchange announced that its CEO, Mark Watkin, would step down, with the Co-Founder and current Board member, Sam Salter, taking over as the acting CEO until a permanent replacement is found. (Please just focus on this one prediction, and not on that time we suggested the market had bottomed.) BikeExchange’s performance on the ASX has been dismal to say the least. Opening at $0.04 this morning, that’s an 82.6% loss over the last year, when it was listed at $0.24. Will we see a recovery with a new CEO at its helm?

Booktopia’s share price remains stagnant (0%) in the last week, closing at $0.38 yesterday. While its Q3 results announcement and news that Tony Nash would be handing over the reins initially resulted in its share price plummeting, it seems it has somewhat stabilised while investors await news of a Nash replacement.

Source: Power Retail ASX Listed E-Commerce Index based on ASX reporting for the period

While MyDeal’s share price growth trajectory would come as no surprise given the Woolworths takeover offer,  both Adore Beauty and Cettire have quietly been gaining momentum. Cettire gained 25% in the last seven days, to $0.63. Like Booktopia, much of this is recovery after an enormous post-Q3 results slump. Adore is up 11.5% in the same period, to $1.51. The growth can’t be directly linked to any announcements from either company. While it could be a natural levelling out after a reactive few weeks, investors haven’t given e-com a boost across the board. Temple & Webster is down 5% in the last week, Kogan is down 1.1% in the same period and Redbubble is up just 0.5%.

The ASX Listed E-Com Index is up 3.5% in the last week, outperforming the ASX200 which is up just 0.2%. But given MyDeal’s +65.6% contribution to the average, it’s not exactly reflective of the e-com market as a whole.

Figures are current as at close of ASX on 24 May 2022. This is analysis only and not intended as investment advice.

The e-commerce landscape is changing. With a Power Retail Switched On membership, you get access to current e-commerce revenue and forecasting, traffic levels, average conversion rate, payment preferences and more!