Here's why the Webjet share price is down 16% in the last 5 months

It's been a turbulent few months for the online travel agency…

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The Webjet Limited (ASX: WEB) share price has slumped over the past 5 months, despite only a few announcements from the company.

Since 15 March, Webjet has transformed its strategy, conducted a $250 million convertible note offering, and released its financial year 2021 results.

Unfortunately, none of that was enough to turn around Webjet's shares' nosedive.

Over the past 5 months, the Webjet share price has slid from $6.18 to $5.15. That's a drop of 16.67%.

Let's take a look at what's been driving the travel agency's share price lately.

A traveller holds her head in her hands at the airport amid border closures and dflight disruptions

Image source: Getty Images

The 5 months just been for Webjet

The Webjet share price hasn't been having a good run recently and all attempts to turn it around have failed.

On March 18, Webjet announced its new strategy to withstand the ongoing COVID-19 pandemic.

The strategy involved a pivot towards business-to-business opportunities through Webjet's WebBeds business.

WebBeds is a supplier of accommodation for members of the travel industry, such as airlines, travel agents, and tour operators.

The company plans to reduce WebBeds' costs and increase its market share and profitability.

The Webjet share price gained 0.9% the day the company released the strategy but fell 2.7% the following day.

After close on 31 March, Webjet announced a $250 million convertible note offering intended to help it get on the right foot once travel restrictions were lifted.

The following day, it announced the notes will hold a term of 5 years, with a coupon of 0.75% per annum on a semi-annual basis. They will be convertible into a fully paid ordinary share with a conversion price of $6.35 – a 22.5% premium on the reference share price of $5.18.

The Webjet share price fell 5.3% on the day of the announcement.

Finally, on 19 May, the company released its financial year 2021 results.

This was the first year since Webjet changed its financial year to run for 12 months until 31 March. Therefore, the company's FY 2021 results actually only covered 9 months' worth of activities.

Webjet reported its earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the 9-month period came to a loss of $125.3 million.

The Webjet share price gained on the back of its results, but only by 0.6%.

Between then and now

Since mid-May, every Australian state and territory except Tasmania has faced at least 3 days of lockdowns, with border restrictions coming into play each time. Additionally, Sydney has been in some form of lockdown since late June.

None of these factors have likely helped the market's confidence in Webjet.

Webjet share price snapshot

Webjet's shares fell 0.19% on Friday, leaving the travel agency's share price 0.19% higher year to date. It is also 47% higher than it was this time last year.

The travel company has a market capitalisation of around $1.9 million, with approximately 379 million shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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