Kogan (ASX:KGN) share price hits new 52-week low. Down 37% in 6 months

Is this what's weighing on the Kogan share price?

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A child in full business suit holds a falling, zigzagged red arrow pointing downwards while sitting at a desk that holds cash and an old-fashioned adding machine with paper spooling.

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Key points

  • The Kogan share price hit a new 12-month low of $7.16 on Wednesday
  • The dip might have been exacerbated by news of Wesfarmers' online marketplace, Catch
  • At the time of writing, Kogan's shares are trading 10.1% lower then they were at the end of last week and 36.9% lower than they were 6 months ago

The Kogan.com Ltd (ASX: KGN) share price has continued its downwards spiral, hitting a new 52-week low of $7.16 on Wednesday – representing a 3.5% slump.

That's the lowest it's been since early December, when it hit $7.20.

At the time of writing, the Kogan share price has rallied to trade at $7.38, 0.54% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.87%.  

Let's take a look at what might be weighing on the online retailer's stock lately.

What's dragging the Kogan share price lower this week?

The Kogan share price has had a rough trot lately and it's potentially been made worse by news from a competitor.

Earlier this week, Wesfarmers Ltd (ASX: WES) released an update that noted its own online marketplace Catch had recorded less than ideal growth.

The retail giant announced, for the first half of financial year 2021, Catch's gross transaction value is expected to have grown by just 1%.

The online marketplace is also expected to record an earnings before tax loss of between $45 million and $43 million. The loss was said to be due to continued investment to support long-term growth and higher levels of inventory clearance.

While Catch bears no direct relation to Kogan, investors likely assumed the businesses would trade alongside each other.

Particularly because, as my Foolish colleague James reported, Kogan and Catch both reported similar earnings for the previous half-year.

Potentially in response to Wesfarmers' update, the Kogan share price slipped 3% on Monday and another 7% yesterday.

Right now, Kogan's stock has tumbled to trade at 64% less than it was this time 12 months ago. It has also slumped 10% since Friday's close.

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. owns and has recommended Kogan.com ltd. The Motley Fool Australia owns and has recommended Kogan.com ltd and Wesfarmers Limited. 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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