The Rise and Fall of Jumbo Stock
It was May 8th when Apostolos Vakakis, the CEO and shareholder of Jumbo, watched as the stock price soared to a historic high of 30 euros. Today, approximately two months later, the stock has plummeted by at least 15%, reaching 25.1 euros, the lowest levels since mid-January.
What Caused the Decline?
What transpired during this time period and how did “Mr. Jumbo” witness the value of his company plummet by almost 700 million euros (from 4.08 to 3.41 billion euros)?
The 3% Placement
Flashback to May 8th. That afternoon, everything seemed to be going well for Jumbo, with the stock price reaching new heights.
Stock Market News: Major Shareholder Sells 3% of Company Shares
After the stock had soared to 30 euros, news of a planned placement for 1.5% of the share capital by the main shareholder started circulating. Eventually, the sale of shares doubled to 3%, with Apostolos Vakakis receiving 108.8 million euros (27.2 euros per share) and reducing his stake to 16.3%.
On May 9th, due to the discount, the stock dropped by 7% and settled at 27.8 euros.
Vakakis: How he sold 10% of Jumbo in 7 years
The 1 euro dividend
Since then, there has been a period of stabilization in the range of 27 euros until it reaches a new high.
The Fall of Jumbo Stock
On July 10th, the stock of Jumbo plummeted by 4% to 26.2 euros, due to the cut in this year’s dividend of 1 euro per share. This unexpected drop left investors worried about the future of the company.
A Manifesto of Pessimism
The following day, the stock experienced an even larger decline of -4.19%, bringing it down to 25.1 euros, the lowest level in the last six months. The founder of Jumbo, who started the company in 1985 with a single toy store in Glyfada, had recently published a manifesto of pessimism, reflecting on the challenges ahead.
The Impact of the Pandemic on Global Trade
The global pandemic has had a significant impact on the world economy, including a decrease in global trade. Many businesses have had to adjust to new challenges and uncertainties brought on by the crisis.
Challenges for Companies
Experts predict a potential increase in corporate sizes this year, but caution that the initial estimates may not be met due to worsening conditions. For example, an estimated 8% growth in companies could potentially drop to just 4% if conditions deteriorate further.
Stock Market Trends
With these challenges in mind, companies like Jumbo are facing uncertain times in the stock market. The historic highs of 30 euros per share seem like a distant memory, with market capitalization dropping to 4.1 billion euros. Shareholders, including Vakakis himself, are closely monitoring the situation to navigate through these turbulent times.
The Greek Stock Market: A Rapid Decline in Value
In just two months, the Greek stock market has experienced a significant drop in value, totaling 670 million euros. Investors are left wondering which Greek companies will be able to bounce back from this downturn and potentially create new millionaires in the process.
(The above information is the result of journalistic research and should not be considered as advice to buy, sell, or hold any stock.)