Harvey Norman Holdings Limited shares drop to a multi-year low

Credit: Scott Lewis

The market may have pushed notably higher on Tuesday, but the same cannot be said for the Harvey Norman Holdings Limited (ASX: HVN) share price.

In fact, the retailer’s shares sank to a multi-year low of $3.45 at one stage in morning trade.

Why are Harvey Norman’s shares under fire?

Investors have been heading to the exits in their droves over the last couple of months following the release of a weak first-half result which saw profit in its Australian franchise business decline for the first time since FY 2013.

This has led many to believe that Harvey Norman is now facing a down cycle amid increasing online competition and a cooling housing market.

Fellow retailer JB Hi-Fi Limited (ASX: JBH) appears to be under pressure as well for the same reasons. So much so, short sellers have been scrambling to get hold of its shares.

At the last count, JB Hi-Fi Limited was the third-most shorted share on the Australian share market with 16.5% of its shares held short.

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Motley Fool contributor Motley Fool Staff 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 Scott Phillips.

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