Shares of Indian food-delivery firm Zomato plunged 14% in intra-day trade on Monday touching as low as INR 46 per share, thereby, wiping out over $125 million in investor wealth.
The Fall: The plunge in the stock price commenced as the mandatory one-year lock-in period for promoters, employees and certain shareholders ended on Saturday, with over 6.1 billion shares coming out of the lock-in period.
Since these shares amounted to almost 78% of the paid-up capital of the firm, analysts had been expecting a drop in the stock price.
Shares of the firm were listed on Indian stock exchanges BSE and the NSE on July 23, 2021.
Investors: In January 2020, ride-hailing firm Uber Technologies Inc UBER had sold Uber Eats to Zomato for a 9.99% stake in the Indian food delivery start-up.
Uber currently owns a 7.78% stake in Zomato. Some of the other big investors include Ant Group, Alibaba Group Holding Ltd BABA, Tiger Global Management LLC and Sequoia Capital India LLP.
Benzinga’s Take: Zomato shares have fallen below their crucial all-time low of INR 50.12 as seen in May. Even on an hourly chart, the stock is trading well below its 200-daily moving average. In the short-to-medium term, the stock looks unattractive unless it manages to convincingly close above the INR 50 level.
Image and article originally from www.benzinga.com. Read the original article here.