Shares of Ausdrill Limited [ASX:ASL] have fallen in value by 9.92% in today’s trading, down to $1.12 per share.
The dramatic fall today comes on the back of two announcements made by the company this morning. The first was a change in substantial holding, where Norwegian bank, Norges Bank, have decreased their share in the company, from 35,971,898 ordinary shares (5.27% voting power), to 33,114,816 (4.84% voting power).
The second announcement — which likely fuelled investor uncertainty — was the resignation of current Chief Financial Officer Theresa Mlikota.
Mlikota has, according to the company’s announcement released on the ASX website this morning, ‘informed the Company she will resign and leave the company within the next three months post-handover’, after accepting the role as CFO at ‘ASX-listed construction materials and lime producer, Adelaide Brighton Limited.’
A fairly predictable market reaction
The two above pieces of information could be viewed in a number of ways, most of which are based on assumptions.
It’s probable that the (potentially coincidental) simultaneous release of two bad pieces of news has just panicked investors. Investors may be assuming the worst as to why Mlikota left the company and why Norges Bank have peeled back support.
This could simply be a case of initial market panic, and the share price could soon bounce-back once the initial reaction dies down.
On the other hand, there may be something brewing behind closed doors that the public aren’t yet privy to.
What’s next for Ausdrill?
Despite today’s drop in share value, the company seems to be on track with their end of 2018 results release, indicating ‘continued strong operational performance across all projects’ and ‘significant contract extensions’ to the tune of ‘circa $1.275 billion’.
Ausdrill’s share price may prove to be a lesson in market sentiment controlling the share price on the short term, as opposed to the company’s fundamentals long term.
Editor, Markets & Money