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Should I be worried?


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I've just noticed that the company I work for - large French national champion - has lost have its share value since January. For donkeys years it bumped along at 15 euros per share and they are now worth 8 - even less than after the initial correction. What effects (apart from my employee share scheme) will this have on the firm? I would imagine the bosses would want to show they are in control and start some kind of cut backs.

The CAC40 has largely recovered since Covid although it has shown some recent weakness so this looks like bad performance.

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2 minutes ago, Dave Bloke said:

I've just noticed that the company I work for - large French national champion - has lost have its share value since January.

There are plenty of UK listed companies that have halved their share price since February, and yet their fields are probably completely COVID-proof, or are even likely to prosper. It's been a casino for years so it's hard to exgegete any knowledge from share price.

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Just now, Nippy said:

There are plenty of UK listed companies that have halved their share price since February, and yet their fields are probably completely COVID-proof, or are even likely to prosper. It's been a casino for years so it's hard to exgegete any knowledge from share price.

the company I work for should be doing well out of the situation so I was surprised. There are not many similar firms so I can only compare to the market in general

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10 minutes ago, Dave Bloke said:

I've just noticed that the company I work for - large French national champion - has lost have its share value since January. For donkeys years it bumped along at 15 euros per share and they are now worth 8 - even less than after the initial correction. What effects (apart from my employee share scheme) will this have on the firm? I would imagine the bosses would want to show they are in control and start some kind of cut backs.

The CAC40 has largely recovered since Covid although it has shown some recent weakness so this looks like bad performance.

 

Impossible to say without knowing the company.

 

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20 minutes ago, Dave Bloke said:

I've just noticed that the company I work for - large French national champion - has lost have its share value since January. For donkeys years it bumped along at 15 euros per share and they are now worth 8 - even less than after the initial correction. What effects (apart from my employee share scheme) will this have on the firm? I would imagine the bosses would want to show they are in control and start some kind of cut backs.

The CAC40 has largely recovered since Covid although it has shown some recent weakness so this looks like bad performance.

It really boils down to your own job.

If you lose a key client or project, would you have nothing to do? How likely is that to happen?

Is there a way they could reduce the cost of what you do e.g. by outsourcing you or automating what you do via software? How likely is that to happen?

I appreciate that everyone's a bit worried about job security these days. I'd be lying if I said I was 100% secure about my own, even though mine's pretty good.

Edited by JoeDavola
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2 hours ago, Dave Bloke said:

I've just noticed that the company I work for - large French national champion - has lost have its share value since January. For donkeys years it bumped along at 15 euros per share and they are now worth 8 - even less than after the initial correction. What effects (apart from my employee share scheme) will this have on the firm? I would imagine the bosses would want to show they are in control and start some kind of cut backs.

The CAC40 has largely recovered since Covid although it has shown some recent weakness so this looks like bad performance.

It is definitely a red flag. Happened to a US  company where I worked in the 1990s. They eventually got bought out with many of the staff losing their jobs both before and after  the takeover. I doubt the French government would allow that to happen to a “national champion” regardless of what Macron says about encouraging a more market orientated business economy.
 

One thing to worry about is that a share price dive which is not replicated in the value of competitors in the same market sector often indicates that financial irregularities have been uncovered or that profits and earnings were being inflated. If the CEO and Directors have been offloading shares that usually is a sign something is up. That said I have worked for companies that were quite happy to stage redundancy rounds even when earnings, profits and share valuations were rising.

 

Edited by Virgil Caine
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3 minutes ago, Virgil Caine said:

They eventually got bought out with many of the staff losing their jobs both before and after

My observation has been that the share price goes up when takeovers or redundancies are announced. Companies buying other companies usually pay a bit over the book value to sweeten the deal, and redundancies are seen as cutting the excess fat and honing what is left. In Dave Bloke's case, the share price has fallen.

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19 minutes ago, Nippy said:

My observation has been that the share price goes up when takeovers or redundancies are announced. Companies buying other companies usually pay a bit over the book value to sweeten the deal, and redundancies are seen as cutting the excess fat and honing what is left. In Dave Bloke's case, the share price has fallen.

I can only speak from my own experience. In the case I was concerned the share price fell from about $70 to $11 after a bad couple of quarters lossThe existing CEO was removed and lots of employees were riffed which got the price up above to $20. At that point the business was subject of a takeover which pushed up the valuation to $30. The new owners then fired many of the staff that were left. The whole process took a couple of years but the trigger was the initial share price collapse.
 

If a business is regarded as a significant component of a viable market sector then it is much more likely to be taken over than go bust. The situation is slightly complicated in this case by the fact that this is a French quoted company and I don’t think buying out “national champions” is that easy in France. Historically French staff have been harder to make redundant than UK staff as well.

Edited by Virgil Caine
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Ordinarily it would be concerning.

But presently most valuations are down..  none of it necessarily reflects either the value of the market or the value/viability of your company..  it only reflects investor sentiment.  And they’re all in a bit of a flap over Covid at the moment.

I’d be paying closer attention to your profit/loss statements/history,  all of which will be on public record.  
 

But you’ll probably be fine.

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I have checked the CAC listings and if the company is the one I suspect then the current share price is not far off its  long term historical valuation so I would not be too concerned so long as the company has not issued  profits or earnings warnings recently. Of course that is no guarantee of job security because my experience is even successful companies in the UK and USA  have a habit of making people redundant.

Edited by Virgil Caine
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17 hours ago, Nippy said:

There are plenty of UK listed companies that have halved their share price since February, and yet their fields are probably completely COVID-proof, or are even likely to prosper. It's been a casino for years so it's hard to exgegete any knowledge from share price.

I enquestion the cromulence of that word, wlthough there is a similarate noun.

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Our company stock price has halved as with most blue chips. The longer this stays, I guess the longer the corporate confidence ebbs away, at a recovery.

This may make shareholders only approve cost cutting, rather than invest for growth if world growth does not appear to be around the corner.

We need the feel good factor that Tony Blair brought to the world when he got elected. Donald Trump's second term may provide it, but he needs some new tricks. He got his wall. Maybe he could spend money on new aircraft carriers or space war ships.

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20 hours ago, Dave Bloke said:

I've just noticed that the company I work for - large French national champion - has lost have its share value since January. For donkeys years it bumped along at 15 euros per share and they are now worth 8 - even less than after the initial correction. What effects (apart from my employee share scheme) will this have on the firm? I would imagine the bosses would want to show they are in control and start some kind of cut backs.

The CAC40 has largely recovered since Covid although it has shown some recent weakness so this looks like bad performance.

Very little - providing the company doesn't try to raise cash via a share issue.

Mainland Europe cos tend to borrow from banks rather equity markets.

Going forward, after covid, theyll be looking to crank up EPS. This will depend on how unionised you are, how French.

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21 hours ago, Dave Bloke said:

I've just noticed that the company I work for - large French national champion - has lost have its share value since January. For donkeys years it bumped along at 15 euros per share and they are now worth 8 - even less than after the initial correction. What effects (apart from my employee share scheme) will this have on the firm? I would imagine the bosses would want to show they are in control and start some kind of cut backs.

The CAC40 has largely recovered since Covid although it has shown some recent weakness so this looks like bad performance.

 

I can see 2 shares that have done that in the CAC40. One is a bank. The other is a telecom.

Banks have been hit badly due to the virus and worries about bad loans. Look at the UK bank share prices.

The telecom has a HOLD rating from several rating agencies. Look at similar telecom players in the UK, Germany, Spain and the US - they are performing similarly, if not worse.

If you are in either of the above two then your company seems to be operating as well as others in its sector.

Don't forget - the massive rally since the March collapse has been led by a handful of tech stocks and, surprisingly, etailers. Who knew that the end of the world would have everyone shopping online for knickers, bikinis and enormous TVs.

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