Kogan.com Limited’s [ASX:KGN] share price continues to plummet this morning following yesterday’s massive 33% drop.
At time of writing, Kogan shares are trading at $3.05 — this marks close to a 70% loss for the tech company, since its record high of $9.85 on 16 March 2018.
Why has Kogan’s share price fallen?
Yesterday morning, Kogan released a business update detailing a disappointing start to the year due to revenue from the global brands category decreasing by 27.4%.
Kogan has blamed changes in the GST law effective from 1 July 2018 for the decline, particularly the ‘avoidance of GST by a number of foreign websites selling into Australia’.
Initially, this saw competitors exit the market and subsequently an increase in revenue. However, the widespread avoidance of GST quickly became apparent.
CEO of Kogan.com Ruslan Kogan said:
‘While growth in the Global Brands division presents a challenge to the business in the short term, we have built a resilient portfolio of businesses, with the core divisions of Exclusive Brands, Partner Brands and Kogan Mobile continuing to show healthy growth.’
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Is this your chance to buy Kogan shares?
Despite the loss by global brands, revenue from exclusive brands increased by 15.7% and partner brand sales grew 73%. Kogan said this was driven by on-boarding of new brands and customers transitioning from global to partner brands.
This recent fall comes shortly after last month’s 9% drop on 4 September, when both founders offloaded millions of shares for the second time.
Despite a 70% drop in value, Kogan’s shares are still up just over 100% from its original listing price in 2016. If this is anything to go by, investors might see this as an opportunity to bag a bargain.
For Money Morning
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