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Online supermarket Ocado saw its shares plummet 20% yesterday, its worst fall in 11 years, as a result of being downgraded by a city broker.
The 20% drop wiped nearly £1.4bn off of the company’s overall value and slashed £32m of value off of co-founder and chief executive Tim Steiner’s stake in the business.
BNP Paribas Exane analyst Andrew Gwynn downgraded Ocado from neutral to underperforming.
He stated that Ocado’s recent lift in stock price had left the risk-versus-reward “out of kilter” after the stock was trading at 800 pence a share before the drop yesterday.
The stock has recovered somewhat with shares trading at 678 pence at the time of writing.
As a result of the lockdown, Ocado’s share price reached a high of 2895p in September 2020 but was trading as low as 343p in June this year.
This news follows the announcement that Ocado sales rose 7.2% in Q3 following pressure from the chair of M&S Archie Norman, which is part of a joint venture with Ocado.
Norman told M&S shareholders at its AGM in July that he was “not happy” with the performance of Ocado.
