Site Loader
Rock Street, San Francisco

JB Hi-Fi Limited’s shareholders have faced a rough year so
far because the share price of the company has lost close to 22% in value during
2017 and the shares fetched less than $ 22. This is lower as compared to the
high share prices of $ 31.21 in 52 weeks. Some of the factors that led to the
decline in the value of shares may be inclusive of Amazon.com. The E-commerce
in behemoth did not even reach the shores of Australia, but the investors were
worried about the impact that it would bring about once it expanded down under
(Greenhalgh,2017). There was considerable anticipation that Amazon would bring
a significant effect on the retail industry in Australia, where customer
electronics were thought to be especially vulnerable.

    The share price of
Harvey Norman Holdings limited also fell close to 30% in 2017.Another factor
that led to the fall in the value of shares in JB is weak spending. One of the
most significant contributors towards weak consumer spending is the low growth
of wages. Increased interest rates from banks also contribute to weak consumer
spending. Through looking at the global events that occurred in 2017 many of
the investors bought little shares from the company. Another factor that
contributed to the decline in share price in the business is downgrades. Many
of similar retailers downgraded their guidance in 2017.In other words, the
trading updates that they issued in 2017 were very poor. Such retailers were
inclusive of RCG Corporation Ltd, Oroton Group Limited, Myer Holdings Ltd and
Reject Shop Ltd. Due to such downgrades, many of the investors interpreted this
as a signal of an ailing industry (Newman, 2017).

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

    Harvey Norman
Holdings Limited is a retail business which is franchised and also possesses
some property development interests. Some of its stores operate predominantly
under a system of franchising throughout Australia. In the overseas markets,
the stores are wholly owned. Such markets are inclusive of Malaysia and
Singapore stores owned by Harvey Norman. The Rick     Hart and Clive Peters brands are also
operated and owned by Harvey Norman (Russell, 2015). The latest ownership
structure is an essential factor to consider in Harvey Norman Holdings Limited
because it is a factor that affects the share price of a company. Harvey Norman
has institutional ownership of 17.28%, and in that case, the company has been
able to face some volatile movements in the share price when block trades are
executed by the institution in the open market. This is mainly when the amounts
of shares that are available are minimal. Such moves have been causing large
swings in the share prices. Another crucial group in the Harvey Norman Holdings
Ltd is the company insiders. Since this team is mainly concerned with the
management of the company its impact on the magnitude of the trading shares in
the market is minimal.

    One of the most
prominent owners in this company is the individual insiders who have a 37.15%
stake. It has been extensively asserted that ownership of this kind negatively
affects the companies that possess a low PE ratio. The public holds a stake of
27.34% in the Harvey Norman Company. Such a size of ownership motivates the
retail investors since they have the collective power in making decisions on
some of the significant policy decisions for instance decisions on the
director’s appointments, executive compensation as well as acquisitions of
businesses. Such ownership levels equip the retail investors with the power to
make some of the initial policy decisions (Rowe, 2017). It, therefore, serves
as a positive sign for the investors who want to involve themselves in crucial
decision making in the company.

 

 

 

 

References

Greenhalgh, J.
(2017). What’s the view on JB Hi-Fi? Intelligent Investor.
Retrieved 25 January         2018, from https://www.intelligentinvestor.com.au/whats-the-view-on-jb-hi-fi-1867136

Newman, R. (2017). 3
reasons why the JB Hi-Fi Limited share price is under fire. Motley Fool           Australia. Retrieved 25 January
2018, from https://www.fool.com.au/2017/06/07/3- reasons-why-the-jb-hi-fi-limited-share-price-is-under-fire/

Rowe, A. (2017). Breaking
Down Harvey Norman Holdings Limited’s (ASX: HVN) Ownership            Structure. Simply Wall St.
Retrieved 25 January 2018, from         https://simplywall.st/news/breaking-down-harvey-norman-holdings-limiteds-asxhvn- ownership-structure/

Russell, S. (2015). Why
the Harvey Norman Share Price Fell Today. Stock Market News,    Finance and Investments | Money Morning
Australia. Retrieved 25 January 2018, from          https://www.moneymorning.com.au/20150408/why-the-harvey-norman-share-price-fell-       today.html

Post Author: admin

x

Hi!
I'm Eunice!

Would you like to get a custom essay? How about receiving a customized one?

Check it out