Myer share price: what’s behind the run-up?
'Our vision remains for Myer to be a data and digital-led retailer supported by our store network, which continues to be an asset to our business.’
Rumours only grow
In a perfect world, markets would be perfectly efficient. Alas, markets are anything but: traders trade on speculation, rumour, lies, news, non-news and a whole host of other ill-shaped data pieces and fragments.
It’s not necessarily a bad thing, but it can have often unintended consequences. Best to be aware of it, rather than not.
Take Myer (ASX: MYR) – a historic piece of Australiana. Despite its place in the country’s history, the stock and the company has struggled over the last decade, as software eats the world and people shun bricks-and-mortar retailers.
Positively at least: the stock was up 9.46% in the first hour of trade on Tuesday. Great for the short-term traders. But long-term, the picture of a retailer in decline is stark.
Over the last decade-and-a-bit the stock is down close to 90%. A perilous proposition for long-term holders.
Myer has shifted its focus to online sales and has seen success from this strategic reorientation. At its last set of interim results in fact, the performance of its online business was the very first thing mentioned, with the retailer noting that it had seen 'strong growth in group online sales, up $71.0% to $287.6 million,' for the 26 weeks to 23 January.
At those levels, online sales represent some 20% of total sales.
This online-focus was also reiterated as part of the company's most recent market update, wherein management disclosed the closure of its Victoria, Knox Myer store.
'In making this decision today, we have taken into account our rising online sales, as well as the number of Myer stores that are in close proximity to the Knox store,’ said John King, Myer’s CEO.
'Our vision remains for Myer to be a data and digital-led retailer supported by our store network, which continues to be an asset to our business,’ Mr King added.
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Myer share price in focus
But the stock likely wasn’t up today because of the retailer’s online focus.
So why was it?
The Australian Financial Review (AFR), after the market close on Monday, ran a story titled 'Solomon Lew shops for more Myer shares'.
Lew, who already holds a 10% stake in the business through Premier Investments, is reported to have been 'hoovering up Myer stock on Monday, on a day when more than 40 million shares changed hands or about 10-times the four-week average.’
‘It’s expected to be back in the market for more stock on Tuesday.’
Whether it was indeed Lew’s Premier Investments that pushed the stock higher on Tuesday, or other traders piggy-backing on the news disseminated by the AFR, or both, remains unclear.
Regardless, the stock closed out the session up 14.8% at 42.5 cents per share, with over 19.9 million shares trading hands during the session.
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