Shares in online surfwear retailer Surfstitch Ltd (ASX: SRF) have fallen a further 5% to 24 cents today after falling around 9% yesterday, with the retailer’s shares now having collapsed in half over just the last month.

On June 9 it updated the market that $20.3 million of revenue booked for financial year 2016 would need to be reversed with little explanation as to why and that as a consequence it was expecting to plunge to a loss between $17.3 million and $18.3 million for the current financial year.

This was the third profit downgrade in under six months, while the sudden exit of the CEO in mid-March also suggested the company may have been struggling more than the market believed.

Today it was issued with a please explain notice by the ASX over suspicious share trading prior to the June 9 announcement. The ASX was querying the trading period that saw the stock fall from 46 cents on June 2 to 40.5 cents on June 6, despite it not publicly releasing any market sensitive news.

The subsequent plunge in share price from around 40.5 cents prior to June 9 to 24 cents today has left many investors deep underwater among them investment manager Perpetual Limited (ASX: PPT).

The Australian equities specialist actually chose to lift its holding in the group to 10.23% of Surfstitch’s issued share capital on May 10. This was just one week after Surfstitch issued the second of its three recent profit warnings and around one month before the final June 9 profit warning that sent the stock into further free fall.

However, it appears as though Surfstitch’s June 9 profit warning has changed Perpetual’s mind on the retailer as it sold around 5 million shares on June 10, although it is still left with a more than an 8.4% holding in a retailer that has now lost 87% of its value over the course of 2016. Ending up the bagholder is not a good look for any investor, and especially not a good look for a professional investment manager coming up to a key reporting period.

I would not be surprised to see Perpetual continue to lighten its substantial holding in Surfstitch in an action that might place more downward pressure on the stock.

I have also written previously about my impression that Perpetual’s latest equities investment team is moving up the risk curve in investment style with sometimes poor results.

Other struggling stocks it has held recently include Shine Corporate Ltd (ASX: SHJ), Nine Entertainment Co Holdings Ltd (ASX: NEC) and Myer Holdings Ltd (ASX: MYR). As a free-to-air-TV broadcaster and department store Nine and Myer are potential victims of online competition, although thankfully it looks like the investment team hasn’t actually missed the rise of the internet as an investment trend given their decision to pile into e-commerce business Surfstitch.

All this means that in my opinion neither Surfstitch or Perpetual are worth considering for investors and it will be interesting to see Perpetual’s net fund flows for the quarter ending June 30 2016, which it should reveal around one month from now.

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.