CSG Share Price Suddenly Comes Crashing Down

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.


Kris Sayce,
Publisher, Money Morning

PS: This week has seen a vast amount of chaos in the ASX. Investing in Aussie stocks without the proper knowledge can be detrimental. Matt Hibbard from Money Morning has all the key information in his free report, titled the ‘Your Complete Guide to Trading Options on the ASX’.

Kris is never one to pull punches when discussing market developments and economic events that can affect your wealth. He’ll take anyone to task — banks, governments, big business — if he thinks they’re trying to pull a fast one with your money. Kris is also the editor of Microcap Trader — where he reveals the best opportunities he’s discovered in the markets. If you’d like to more about Kris’ financial world view and investing philosophy then join him on Google+. It's where he shares investment insight, commentary and ideas that he can't always fit into his regular Money Morning essays.
Kris Sayce is the Publisher and Investment Director of Australia’s biggest circulation daily financial email, Money Morning Australia.Kris is a fully accredited advisor in shares, options, warrants and foreign-exchange investments. Kris has close to twenty years’ experience in analysing stocks. He began his career in the biggest wasp’s nest in the financial world — the city of London — as a finance broker back in 1995.
It’s there where he got his ‘baptism of fire’ into the financial markets, specialising in small-cap stock analysis on London’s Alternative Investment Market. This covered everything from Kazakhstani gold miners to toy train companies.After moving to Australia, Kris spent several years at a leading Australian wealth-management company. However he began to realise the finance and brokerage industry was more interested in lining its own pockets with fat fees, commissions and perks —rather than genuinely helping out the private investors they were supposed to be ‘working’ for. So in 2005 Kris started writing for Port Phillip Publishing — a company which was more attuned to his investment outlook. Initially he began writing for the Daily Reckoning Australia— but eventually, took over Money Morning. It’s now read by over 55,000 subscribers each day. Kris will take anyone to task — banks, governments, big business — if he thinks they’re trying to pull a fast one with your money! Whether you agree with him or not, you’ll find his common-sense, thought-provoking arguments well worth a read. To have his investment insights delivered straight to your inbox each day, take out a free subscription to Money Morning here. Kris is also the editor of Tactical Wealth and Microcap Trader where he reveals the best opportunities he’s discovered in the markets that you could profit from. If you’d like to learn about the latest opportunity Kris has uncovered, take a 30-day trial of Tactical Wealth here or Microcap Trader here. Official websites and financial e-letters Kris writes for:

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