The Cettire Ltd (ASX: CTT) share price is having a day to forget on Wednesday.
In morning trade, the ASX All Ords stock was down as much as 27% to $3.41.
It has since recovered a touch but remains down 20% at the time of writing.
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What's going on with this ASX All Ords stock?
On Monday, the company revealed that its founder and CEO, Dean Mintz, had sold $127 million worth of Cettire shares. This represented a sizeable ~7.2% of the company's issued capital.
Commenting on the sell-down, Mintz said:
Cettire continues to perform very strongly as demonstrated in the Company's recent H1-FY24 Results. In response to strong investor demand, undertaking this share sale provides enhanced liquidity and free float, improving the likelihood of achieving further major index inclusion over time.
It certainly was fortunate timing for Mr Mintz. At today's low, the shares he sold had a market value of $93.8 million. That's approximately $33 million less than he received.
But why is the Cettire share price crashing today?
Today's decline appears to have been driven by a report from the Australian Financial Review.
It tested the company's online luxury goods platform, spending $1,133.78 on several items.
It highlights that this figure includes shipping and taxes, but does not include the additional duties of $169.43 that were charged, bringing the total amount to $1,303.21.
However, the AFR claims that none of the duties paid as part of the order were handed over by Cettire to Australian customs officials.
The report quotes a DHL customer services officer, that said:
I can confirm that there were no DUTY/TAX charged for these AWBs and did not meet the individual threshold of $1,000.
Why?
The duties were not paid to customs because the goods were shipped individually and none of the items rose above the threshold where duties are enforced. Nevertheless, Cettire charged and banked the money.
Is that correct? The report also highlights that the Australian Border Force would consider the above purchase and delivery as a split consignment, which means that those duties are payable under section 68 of the Customs Act.
In light of the above, investors appear to be questioning how profitable the company would be if it were paying all its duties.
The company has not yet commented on the report.
The Cettire share price remains up over 120% since this time last year despite today's decline.
