Why Tassal Group Shares Fell Today

What happened to the Tassal share price?

Shares of Tassal Group Limited [ASX: TGR] fell over 8% today. Tassal is a salmon farmer and related product distributor. It farms its salmon in Tasmania. The stock is still up over the last year, however

Why did TGR shares drop?

Tassal went into a trading halt yesterday. It later announced it was raising $80 million dollars via an institutional placement to fund a growth strategy. The company is trying to produce more salmon to meet a growing market for its products. Tassal is looking to raise a further $20 million from its existing shareholders.

What now for Tassal Group?

The stock is down largely because the company is issuing over 17 million new shares. This means future earnings from the company will be distributed across a larger base. A fall in the price often occurs after a company announces it is raising money by issuing stock because of this reason. Medium term, Tassal is an interesting stock to see how the market prices in the growth from the company’s expansion plans and how it progresses.

Regards

Callum Newman


Originally graduating with a degree in Communications, Callum decided financial markets were far more fascinating than anything Marshall McLuhan (the ‘medium is the message’) ever came up with. Today Callum spends his day reading and researching why currencies, commodities and stocks move like they do. So far he’s discovered it’s often in a way you least expect.


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