Trade Me shares sink near six-month low
Trade Me Group shares fell near a six-month low after two research houses downgraded their rating for the online retail platform's stock.
The shares fell as low as $4.85 and were recently down 6.1 percent to $4.90 after Deutsche Bank downgraded the stock to a 'sell' rating with a price target of $4.30 and Macquarie Research lowered its recommendation to 'underperform' with a $5 price target. Trade Me shares have slumped about 12 percent since July 25, a day after reports emerged Amazon had settled on Melbourne as its base for an Australian launch later this year.
The downgrades come ahead of Trade Me's annual earnings on Aug. 24. Forsyth Barr's James Bascand, who rates Trade Me an 'underperform', predicts a 9 percent increase in normalised profit to $92.2 million on an 8.1 percent gain in revenue to $235.7 million.
"We've seen a couple of downgraded expectations for Trade Me," said Grant Williamson, a director at Christchurch-based brokerage Hamilton Hindin Greene. "Maybe they think the result won't be too good and have got their clients out beforehand."
Wellington-based Trade Me is seeking to expand its offering in the auto space, with an application to the Commerce Commission to buy cloud-based auto dealer management platform motorcentral.co.nz. New Zealand's expanding population and strong currency have seen record new car sales in recent years.
Today, the company stated the appointment of Xero executive Mark Rees as its new chief product and technology officer, effective from September. Last month, it unveiled changes to its executive structure, creating a chief customer officer which was filled by Trent Mankelow and the creation of the new role Rees was appointed to. It also lifted the heads of Trade Me Motors and Jobs, Alan Clark and Jeremy Wade, to the executive team.