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Why Bubs, PointsBet, Perpetual, & Waypoint shares are dropping lower

red arrow pointing down, falling share price
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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing the benchmark index is up an impressive 1.05% to 6,107.3 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Bubs Australia Ltd (ASX: BUB) share price is down 2.5% to 95 cents. The catalyst for this appears to be a broker note out of Citi this morning. According to the note, the broker has downgraded Bubs shares down to a neutral rating and cut the price target on them to $1.00. The broker has concerns that the slowdown in sales experienced in the fourth quarter could carry over into the first quarter and delay profitability.

The Perpetual Limited (ASX: PPT) share price is down 1% to $33.26. This follows the completion of its placement this morning. The fund manager has raised $225 million from institutional investors at a price of $30.30 per new share. The proceeds will be used to partly fund the acquisition of a 75% interest in Barrow Hanley for US$319 million (A$465 million). Barrow Hanley is a Texas-based investment manager with funds under management of approximately US$44.1 billion.

The PointsBet Holdings Ltd (ASX: PBH) share price is down over 3% to $6.07. This follows the release of the sports betting company’s fourth quarter update. Although PointsBet delivered a 57.9% increase in quarterly turnover to $349.4 million, investors appear disappointed with a decline in US turnover. It fell 12.9% compared to the prior corresponding period to $46.5 million.

The Waypoint REIT Ltd (ASX: WPR) share price is down 4.5% to $2.61. This morning the service station owner, previously known as Viva Energy, revealed that Charter Hall Long WALE REIT (ASX: CLW) has sold its entire 5% stake in the company. Charter Hall sold its stake for $2.61 per security, which equates to a total of $101.6 million.

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Returns as of 6th October 2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. 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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