If you cast your eyes over some of the ASX’s best and worst performing shares today, you might find your eyes catching the Cettire Ltd (ASX: CTT) share price. In fact, this online luxury goods seller is today the worst performing share in the All Ordinaries Index (ASX: XAO), down a nasty 21.43% to $1.98 per share.
And that’s where it will stay, at least for now. Cettire released an ASX announcement at 10:41am today, which concisely informed investors that “trading in the securities of the entity will be temporarily paused pending a further announcement”.
Today’s events will be a disappointment for investors who, until today, had enjoyed some phenomenal gains with Cettire shares.
As of Wednesday last week, the company had enjoyed a year-to-date gain of 482%, and a 470% rise since its initial public offering (IPO) back in December last year. But last week, things started to go the other way for Cettire.
On 9 June, the company was riding high, having just hit a new all-time high of $2.91 per share. But by Friday afternoon, Cettire shares were down more than 12% from those highs. And today’s 21% plunge means they are down by 31% in less than a week.
So what’s happening with the Cettire share price today?
Well, unfortunately, we don’t yet know for sure. It’s not entirely clear what caused the rapid selloff in Cettire this morning (before the company put a halt to trading).
Apart from the trading halt notice, there hadn’t been any official news about the company since 11 June. And that was just an S&P DJI announcement that Cettire would be joining the S&P/ASX All Technology Index (ASX: XTX) as of 21 June. Hardly an announcement that would give investors a reason to hit the sell button, one could argue.
We might have a clue with some reporting from the Australian Financial Review (AFR) last week though. Last Friday, the AFR reported fund managers were “cashing out” of the company amid concerns over Cettire’s “long-term prospects”, sales tactics and supply chains.
What’s been said about Cettire?
The AFR reported that many goods available on Cettire’s online marketplace were actually cheaper on the brand owners’ stores themselves. Here are some of the AFR’s examples:
Zimmermann’s cassia waterfall bikini costs $275 on Cettire, down from $344, compared with $250 at Zimmermann’s online store. Zimmermann’s cassia mini dress costs $961 on Cettire but $695 on the Zimmermann site.
The report also alleged that:
Cettire has geoblocked IP addresses originating from parts of Europe including France and Italy, preventing brand owners from seeing the products and prices it offers.
One fundie told the AFR: “I don’t understand how it does business, it just has these agreements with wholesalers that no one can tell you about.”
Another stated the following about Cettire:
It does seem to operate in this cloud of mystery… The fact they had to block their IP for their website in Italy goes to show that there are these risks. For us, it got too expensive and we sold out…
However, it’s worth noting the AFR report also points out a number of fundies are still very bullish on Cettire and the company’s future.
We shall have to wait and see what Cettire has to say about its trading halt today. But perhaps some of these concerns were what was weighing on the Cettire share price last week, and possibly this morning.