Asian Sales Drop Leads To Massive Selloff In Shares Of Infant Formula And Milk Producing Company Bellamy’s Australia
Top Australian baby food and milk producing company Bellamys Australia Ltd (AX:BAL) has very recently gotten their company shares barred from trading at their own request. This leaves thousands of investors held back from selling or buying the company's shares as uncertainty loomed over the company’s future.
The suspension of their shares from trading, a request which was permitted this Monday, was given by the Australian Stock Exchange and is set to last until December 21 this year.
Bellamy’s Australia is currently facing a supply issue in connection with the company sales in the Chinese market. The company shares recently suffered a huge setback last December 2 which was the world’s biggest online shopping day during China’s Singles Day as the company announced sales which did not meet market forecasts as the products of Bellamy’s Australia were usually at a very high demand from the country. The products of the company which is mostly organic and local dairy were very popular among the Chinese people.
According to experts, the company’s growth was mostly driven by the sales from Asian countries who saw a potential shortage in the supply of products from the company. This is why the disappointing sales last December 2 led turned Bellamy’s shares into an oversold stock.
The disappointing sales of the company led to a drop in Bellamy’s market capitalization by not less than $500 million. Bellamy’s shares then dropped by almost 44%.
Aside from the rising investor doubt on the company’s growth being driven by sales from Asian countries, Bellamy’s also has not commented on any inquiries or has provided their shareholders any further information on the status of the business.
Class Action Lawsuit
One of Australia’s top plaintiff law firm Maurice Blackburn has filed a class action lawsuit against the baby milk and infant formula company Bellamy’s Australia after it placed a halt temporarily to the trading of their shares.
This comes from enraged investors as the company’s actions were unbecoming given the recent events where not less than $500 million was wiped off the company’s market capitalization.
Maurice Blackburn said on Wednesday that it is now currently investigating a possible class action claim against the embattled Australian company. A page online has been opened by the law firm asking Bellamy’s investors who have been affected by the recent events of the company’s shares to sign up or register. Two other firms have also been reported to be investigating a class action lawsuit.
Bellamy’s Shares
At the moment, Bellamy’s Australia Ltd shares have been suspended from trading since Monday upon the company’s own request to the ASX. According to the company, they would be releasing an updated statement on Bellamy’s expected financial results.
On Bellamy’s disappointing December 2 sales from China which were way below what investors have expected, shares plunged by as much as 44% from recently trading at 12.13 to a suffered a plummeting drop at 6.850. The company then traded for five more sessions at around the 6.680 price level before the company requested a temporary halt to the trading of their stocks.
The Relative Strength Indicator (RSI) also showed that since the December 2 results, the shares of the company have been oversold as the RSI indicator have dropped and remained under the 30 level since then. Bellamy’s have received varied ratings since then from sell to hold on hopes that the company would bring about some good news on the end of the temporary suspension of their shares from being traded.
Bellamy’s shares are to return to trading by December 21.