STW share price collapses wiping $100m off company value in one morning

stw logoSTW Communications Group has seen its share price plunge by more than 25 per cent today after the group announced its net profit was down 7.8 per cent to $45.6m.

As of 12.30pm STW shares had dropped to 76 cents, after closing at $1.028 yesterday, meaning it shed more than $100m off its market capitalisation this morning.

The crash came after Australia’s largest marketing services group revealed its earnings dropped by five per cent last year, with CEO Mike Connaghan pinning the blame on the group’s new business record and signalling it would undergo a “strategic and structural review of the business”.

Comment is being sought from STW Group.

A chart showing the STW share price performance this morning. Source: Google Finance

A chart showing the STW share price performance this morning. Source: Google Finance

STW opened this morning with a market capitalisation of $412.5m before falling to a value of $296.7m at around lunchtime today. At 11.3oam the share price was as low as 72.5 cents.

The fall is a marked change from this time last year, when STW shares were worth $1.475, valuing the company at just below $600m, with the shares dipping around April but managing to remain above the $1 value mark. After a modest rally after the dip in April and May, share price remained steady before another dip in August.



Later in the month the share price took a turn for the worse, diving from $1.30 to $1.09 by October 13. In August Connaghan told a public briefing announcing the group’s half yearly results the group needed to focus on winning more business in the second half of the financial year.

The share price remained consistent until the end of the year, dropping on December 12 from $1.06 to 95c on December 15. The share price did not manage to climb above the $1 value mark for the rest of the year.

December saw WPP increase its stake in the group, sparking speculation of a potential takeover. WPP subsidiary Cavendish Square Holdings, STW’s biggest shareholder, increased its stake in the company to 22.4 per cent, despite the stock losing 40 per cent of its value in 2014.

On January 9 an STW share was worth 0.895 cents dropping further to 0.865 cents on January 15, but in recent days the value of the stock had risen sharply to close at $1.02 yesterday.

STW Group’s lowest value came on March 13, 2009, when shares were worth 34c.

Miranda Ward  


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.