The AGL Energy Ltd (ASX: AGL) share price has dipped into the red during afternoon trade.
AGL shares are currently down 0.8% to $8.69, having posted gains of 0.8% in early morning trade.
Still, that puts the AGL share price right about where it was before news broke that the company's demerger was off the table.
That came after the AGL Board conceded they were unlikely to get the necessary shareholder approval to move ahead with the demerger.
Saying they still saw the plan to split the company into the separate coal power-focused Accel Energy alongside energy retailer AGL Australia as "the best way forward," the CEO, chair, and two directors tendered their resignations.
Yet despite the loss of key leaders and spending some $160 million on the demerger plans, the AGL share price has come out unscathed.
What's going on?
For some insight into that answer, we turn to Brian Gould, head of trading at Capital.com Australia.
Optimism and pessimism in balance
According to Gould:
There are traders on both sides of this stock who are focused on different outcomes. Buyers who entered the stock on the back of Mike Cannon-Brookes' purchase of an 11.28% block see the scrapped demerger and the loss of its CEO, Chairman and others as a good thing, while longer-term investors are concerned that the company is now rudderless.
The share price action tells us that the optimism and pessimism present in the market around AGL are pretty well matched.
Not only is AGL trading right about level with where it was before the demerger was scrapped, it's also trading some 22% higher than before news of a potential takeover first broke in February.
And, looking ahead, traders appear to believe the AGL share price could have further to run.
"For the time being, traders on our platform are predominantly long AGL CFDs [contract for difference], because the risks seem to be to the upside and that's scaring short-sellers away," Gould said.
AGL share price snapshot
The AGL share price has had a strong run in 2022, up 42%. That compares to a year-to-date loss of 5% posted by the S&P/ASX 200 Index (ASX: XJO).
