CSG Ltd [ASX:CSV] stocks crashed a deathly 31.72%. Their share value now sits at a low $0.297 from a much higher $0.445 three days ago.
Their market cap remains at $95.76 million, with no indication of an increase after this unfortunate occurrence.
CSG shares have not been this low for a very long time, only six months ago they were sitting on a $0.7600 share value.
What was the cause for this sudden decrease?
Today, CSG came out of its trading halt, providing the market with their terrible latest trading update. CSG is plagued with heavy taxes, depreciation and amortisation.
This all stems from underperformance in the sales department, as management blamed the downgrade on their low print sales and equipment sales.
CSG’s overall sales rate is much lower than expected across all sectors of the business. This does not grant the business a stable platform to pay back their looming debts.
The recent market crash is also to blame, as many retailers were affected by the sudden drop. CSG is no exception to the chaos that emerged earlier this week.
Unlike many other retailers, CSG has no financial reinforcement to use as a counter. As a result, things have only been made worse for CSG, as they struggle to come up with an effective counter.
Can they bounce back?
Management have advised that it’s seen an increase in subscription revenue. This has increased by 39%, and technology subscription equipment by 50%. Although, this isn’t enough to compensate for their over bearing debts and consistent money loss which has occurred.
As a result, CSG has Credit Suisse to provide helpful solutions and strategies which can potentially increase the company’s shares for holders, while at the same time deal with its under-performing assets.
CSG has been on the decline for quite a while now, and it’s hard to tell if they’re going to make it through their financial mess.
In 2018, they may need to change their business dynamic and find out a way to maintain their business subscriptions and overall services.
Hopefully things could make a turn for the better, and eventually bounce back over time.
Publisher, Money Morning
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