Thomas Cook's share slide continues

Thomas Cook's share slide continues

Thomas Cook continued its stock market descent yesterday despite announcing an extension of its banking facilities ahead of City trading and confirming plans to raise £200 million through asset sales.

The group’s shares fell a further 4.9% over the day, taking Thomas Cook’s market capitalisation to just over £616 million. Shares were priced at 67p following a 44% decline last week amid growing expectations of a private-equity bid for the group.

Shares in rival Tui Travel also fell on Monday, by close to 5.86%, amid a general decline in the price of shares as markets took fright at the prospects of a default in Greece and failure to set a budget in the US.

The FTSE 250 index of companies, which includes both Thomas Cook and Tui Travel after both fell out of the FTSE 100, fell by 1.86%. Analysis of stock exchange movements shows the market usually rises on a Monday.

Tui Travel’s share price also fell last week by 17%, pulled down by general concern about the state of the travel market following Thomas Cook’s profit warning last week. However, Tui Travel retains a market capitalisation of £2.12 billion.

Little more than a year ago, City analysts were suggesting Thomas Cook stock was undervalued at £1.90 and was worth 50p-60p more. Other major companies in the travel and aviation sector also saw declines.

Shares in easyJet fell 4.84%, outpacing the fall in market. British Airways parent International Airlines Group saw a 1.94% fall on the London Stock Exchange and Carnival a 0.95% decline.

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