Day falls in stock market at historical lows

Day falls in stock market at historical lows


The shares of Dia plunged more than 17% close to 9.30 am and were at record lows below the euro, despite having opened in positive territory, with an advance of 0.5%, after losing yesterday more than 42 %.

Specifically, the titles of the supermarket chain began the session in green, with a price of 1.10 euros, although, minutes later, reversed the trend, with a decrease of 17.7%, to stand at 0, 90 euros.

The decrease on Tuesday is in addition to that registered yesterday, when the actions of the supermarket chain plummeted 42.2% after announcing that it has lowered its estimates of results for the current year, while it has decided to suspend the Dividend distribution policy for 2019.

Specific, the titles of Dia staged yesterday a 'black' day coinciding first with the decision of JP Morgan to reduce its target price by 19% from 2.10 euros to 1.70 euros, and later with the 'profit warning', which led the stock to plummet over 43% throughout the afternoon.

So far this year, Dia shares have plummeted almost 75% and 65% since it went public in July 2011.

The supermarket chain has estimated that the adjusted gross operating result (Ebitda) forecast for this year will be between 350 and 400 million euros, compared to 568 million euros in 2017, burdened by a fall in the volume of sales, which has also impacted gross margin, and an increase in operating expenses.

This estimate does not include the impact that could arise from the imminent application of accounting standard IAS 29 for hyperinflationary economies that will be mandatory for Dia and its group from the third quarter of 2018 due to its activity in Argentina.

On the other hand, as a result of the process of reviewing the financial closing estimates for 2018, the company considers that certain adjustments must be incorporated to the consolidated financial statements for the year 2017, which is estimated to beThey would have a negative equity effect for an approximate amount of 70 million euros.

Once the process of validation and confirmation of this amount is completed, the supermarket company will proceed, in the formulation of the 2018 annual accounts, to restate the 2017 figures, which are presented for comparative purposes.

For its part, the US investment bank has revised down its estimates of gross operating profit (Ebitda) of the company for this year and says that, although Dia is a company that operates as the format of food sales "more attractive ", is having a" lower performance "than competitors such as Mercadona, Carrefour, Lidl, Pingo Doce and Sonae.

On the other hand, the bears have reduced their pressure on the supermarket chain and chain several weeks of decline to stand at 17.65%.

Currently, the company with the most short positions in the Dia Group is Darsana Capital Partners with 1.92%, followed by AQR Capital Management with 1.88% and AHL Partners, with 1.7%.

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