After a dramatic 19.5% share price plunge yesterday, the Slater & Gordon Limited (ASX: SGH) share price is again suffering heavy selling pressure.
Down 6% at the time of writing, Slater & Gordon's share price has now fallen more than 68% since the beginning of 2015. That's a massive drop by anyone's standards.
After being quite bullish on the company and holding shares leading up to 2015, I can now empathise with Slater & Gordon investors who've watched helplessly as their company drove itself into the ground. Questions were raised by analysts for years regarding its cash flow, but the company's concerning $1.2 billion acquisition in the UK and a subsequent investigation into its accounting practices were the main catalysts for a rerating.
Unfortunately, the pain doesn't stop there. As fellow Motley Fool contributor, Sean O'Neill wrote yesterday, "if the cash flow crunch leads to significant financial stress or if the company fails to meet its earnings guidance for the [2016] year, it could lead to significant long-term consequences for shareholders."
At $2 apiece, the last time Slater & Gordon's share price saw these levels was in late 2012.
Buy, Hold or Sell?
Candidly, Slater & Gordon is going to go down as one of my worst investments. And while I may ordinarily get excited by a falling share price, I think Slater & Gordon is a company savvy investors would do well to avoid, for now at least.
