The worst performer on the ASX 200 on Wednesday has been the Tassal Group Limited (ASX: TGR) share price.
In early afternoon trade the salmon and seafood producer’s shares are down 7% to $4.61.
Why is the Tassal share price crashing lower today?
With no news out of the company, today’s decline appears to be related to an AFR report on Tuesday.
According to the report, the often-deadly listeria bacteria was detected in its salmon when tested at a Queensland warehouse on February 11.
Although the outbreak occurred three days prior to the company’s half year results release, management opted not to disclose the news to investors.
When quizzed by the AFR, CEO Mark Ryan advised: “We sell over 33,000 tonnes of product and 2 tonnes of product was not released.” Before adding that the detection of listeria demonstrates that “the process works”.
Interestingly, just a week after the outbreak, Mr Ryan offloaded 200,000 shares through on-market trades. He received an average of $4.822 per share or a total consideration $964,400 and was left with a holding of 160,378 shares.
Tassal advised that the sale was “undertaken to enable Mr. Ryan to balance his personal financial position and finalise a payment of income tax with respect to a previous issue of Tassal shares to him.”
Whilst this isn’t necessarily a good look for the company, I think the selloff is a bit of an overreaction.
If the salmon had made it out onto the shop floor then I would be concerned, but it does appear as though the company has processes in place to prevent this.
This could arguably make this share price weakness a buying opportunity, though it may be best to wait for the dust to settle before making a move.