Shares of Ardent Leisure Group (ASX: AAD) have been sold down heavily today.
As much as 22.3% of the market value was wiped from the company’s share price shortly after the market opened, sending the shares to a low of just $1.827. They have since rebounded somewhat, but are still trading more than 14% lower at $2.02 after also losing almost 8% late on Tuesday.
Village Roadshow Ltd (ASX: VRL) shares also fell 3.4% this morning.
Ardent Leisure Group shareholders are responding to yesterday’s devastating news that four people were tragically killed at its Dreamworld theme park on the Gold Coast. You can read more about that, here.
Analysts also reacted swiftly, slashing their target prices on the stock. Citi cut its target by 16% to $2.55 and Morgans cut its by 32% to $2.23, according to the Dow Jones Newswires.
Aside from the potential liabilities that Ardent Leisure Group could face, there is an obvious concern that yesterday’s incident could deter people from visiting its theme park attractions. This would impact Ardent Leisure’s bottom line.
Risk averse investors may want to steer clear for now, at least until the market is given a clearer undertstanding of the cause of the incident, and any potential liabilities the company may face.
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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. 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.