The Helloworld share price surged 19% in early August. Here's why it just lost ground

At the opening bell this morning, the Helloworld share price was up 19% so far in August. Today its share price fell sharply…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Helloworld Travel Ltd (ASX: HLO) share price gained an impressive 18.9% during the first 7 trading days of August. The travel service provider's performance was helped by yesterday's huge daily gain of 11.8%.

Today, Helloworld's share price retracted sharply, down by 4.23%.

That still sees Helloworld's shareholders with a 13.2% gain for the month of August, compared to a 3.0% gain in the All Ordinaries (INDEXASX: XAO).

But the company has a lot further to go before its share price regains is pre-COVID-19 levels. Travel shares were particularly hard hit by the social distancing measures, lockdowns, and state and national border closures put in place to contain the virus. And Helloworld was no exception.

Helloworld's share price plunged 83% from 21 February before finding a bottom on 23 March. Since then the share price has rebounded 161%. But that still leaves it down 63% for the 2020 calendar year.

Currently trading for $1.81 per share, Helloworld's market cap stands at $280.6 million.

What does Helloworld do?

Helloworld Travel, formerly Helloworld, is a travel service provider. The company sells international and domestic travel products and services in Australia, New Zealand, Asia and the South Pacific. Its 3 segments are retail, wholesale and travel management.

The retail segment acts as a franchisor of retail travel agency networks. These include Helloworld Branded Network, Helloworld Associate Network, Helloworld for Business and My Travel Group. The wholesale segment acquires air, cruise and land products which it sells through retail travel networks. Its travel management provides services to corporate and government customers. That includes booking customer flights and obtaining accommodations.

Why is the Helloworld share price tumbling today?

Last week and into the first 2 trading days of this week, investors were buoyed by increasing reports of a possible coronavirus vaccine and by slowly falling new infection numbers in hard hit Victoria.

Today, the news of new community transmissions of the virus in New Zealand resulted in fresh lockdown measures in Auckland. This likely led investors to believe that international travel, particularly the trans-Tasman bubble, are further off than hoped.

Combined with some likely profit taking after its gains of 19% in the first 7 days of August, the Helloworld share price closed down 4.2%.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Helloworld Limited. 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.

More on Share Market News

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Three businesspeople leap high with the CBD in the background.
Share Market News

Boom! ASX 200 blasts to new record highs

ASX 200 investors just sent the benchmark index into uncharted territory.

Read more »