Kogan (ASX:KGN) share price falls amid remuneration second strike

Kogan's board came under fire at its AGM…

| 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

It certainly was a rollercoaster of a day for the Kogan.com Ltd (ASX: KGN) share price on Thursday.

The ecommerce company's shares rose 3.5% to $9.19 shortly after the release of its annual general meeting update. However, once everything was absorbed, it didn't take long for the Kogan share price to give back those gains and more.

The company's shares ultimately ended the day over 4% lower at $8.49.

A woman screams and holds her hands up in frustration.

Image source: Getty Images

What happened to the Kogan share price on Thursday?

There appear to have been a few catalysts for the volatility in the Kogan share price on Thursday.

One was its trading update. Although Kogan spoke about further revenue growth during the first four months of FY 2022, this hasn't translated into profit growth.

Kogan revealed that its adjusted EBITDA (including Mighty Ape) was down 61% year to date to $12.4 million. Excluding Mighty Ape, adjusted EBITDA was down 70.3% to $9.5 million over the prior corresponding period.

Given that Kogan reported adjusted EBITDA (including Mighty Ape) of $10.8 million for the first quarter, this means it only added $1.6 million of EBITDA in October. That compares to a first quarter average of $3.6 million per month. And this is despite the company advising that it had resolved previous inventory pressures during the first quarter, reducing warehousing costs.

Shareholders vote against the renumeration report

Another factor that could be weighing on the Kogan share price is news that shareholders have dealt the company a second strike after voting against the adoption of its renumeration report.

Under the second strike rule, if shareholders vote down a company's executive remuneration package two years in a row, the board may be voted out of office. A total of 42.19% votes were cast against the report, similar to last year's annual general meeting.

However, fortunately for the Kogan Board, shareholders decided against spilling the board, with 97.56% of votes cast against it. But clearly a warning shot has been fired in the direction of the Kogan board.

The Kogan share price is down 56% since the start of 2021.

Motley Fool contributor 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 and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Winning woman smiles and holds big cup while losing woman looks unhappy with small cup.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough end to a tough week.

Read more »

three young children weariing business suits, helmets and old fashioned aviator goggles wear aeroplane wings on their backs and jump with one arm outstretched into the air in an arid, sandy landscape.
Share Gainers

3 ASX 200 stocks screaming higher in this week's sinking market

Investors sent these three ASX 200 stocks surging this week despite the broader market retrace. But why?

Read more »

A female athlete in green spandex leaps from one cliff edge to another representing 3 ASX shares that are destined to rise and be great
Share Gainers

Guess which ASX lithium share is leaping 14% in Friday's sinking market

Investors are piling into this small-cap ASX lithium miner today. But why?

Read more »

Man looking happy and excited as he looks at his mobile phone.
Share Gainers

Why Ampol, Atlantic Lithium, Brightstar, and Premier Investments shares are rising today

These shares are ending the week on a positive note. But why?

Read more »

3 children standing on podiums wearing Olympic medals.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a horrid day on the markets.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why EBR, EOS, Racura, and Woodside shares are rising today

These shares are avoiding the market selloff.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy hump day session for the ASX.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Share Gainers

Why EOS, Humm, New Hope, and Sims shares are storming higher today

These shares are having a good session on hump day. But why?

Read more »