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Why are your share prices crumbling?

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A nod of sympathy in the direction of Ted Baker, which got absolutely clobbered today on the back of a profit warning that was bad, but surely not indicative of catastrophe.

The RNS wins plaudits for being straightforward.

This wasn’t one of those pointless attempts to bury the bad news, a tactic which only makes sentiment worse.

The company is perfectly upfront about the shape it is in and mostly forthcoming about exactly why.

Its reward for this was a 25% plunge in the share price, which might have some flaks and company insiders wondering if it would have been better to disguise the truth.

It wouldn’t. But there’s no doubt that market reaction to these sort of announcements is harsher than it used to be.

This might be due to increased City jitters (Brexit, etc). Or it might be because fewer investment banks are making markets in stocks, which means there’s less liquidity, which means when shares get sold off, the price really suffers.

Presumably, the investor relations folk were explaining to long-term holders of the stock why the share plunge was quite so violent.

I think there’s a growing need for flaks to give that briefing to hacks, without sounding defensive.

Fair minded hacks can see that market reaction to bad news is a lot more severe than it used to be. Tell us what’s going on.


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