Before the bell: big fluctuations

The party on the stock markets doesn’t seem to be taking a break just yet. For Gimv, this is a good time to announce a capital increase.

Earnings season always brings both rewards and punishments for investors. As a result, stock market fluctuations are currently more pronounced than usual. Netflix shares, for example, briefly climbed to 999 dollar (+14.9%) in the morning before closing 9.7% higher. Johnson & Johnson fell by 4.1% during the day but ended 1.9% lower. Procter & Gamble rose as much as 4% at one point, finishing with a 1.9% gain. Oracle (+6.8%) performed exceptionally well following its announcement of ambitions in artificial intelligence. The S&P 500 gained 0.6%, and the Nasdaq rose 1.3%. European markets also saw gains, with the Euro Stoxx 50 climbing 0.8%. In Brussels, investors welcomed Sofina’s impressive half-year results (+4.7%), while bpost (-4.6%) reacted belatedly to PostNL’s stock drop. In Frankfurt, Adidas jumped 6% higher.

In Tokyo, stock prices are up 0.5% on average this morning, while the Hong Kong market saw a 0.6% decline. Later today, consumer confidence figures will be released both in Belgium and the eurozone. On Wall Street, we’ll see earnings reports from American Airlines (before the market opens) and Texas Instruments (after hours).

For the sport

It’s not just athletes who struggle; their suppliers also sometimes find it difficult to stay on the podium. Adidas is currently in great shape. Just over two years ago, you could buy a share for less than 100 euro; today, that same share is worth 258 euro. Puma, on the other hand, is struggling. Its share price has dropped from 111 euro to 42 euro over the past three years. That figure might fall further today as Puma released disappointing results after the market closed yesterday. Although annual revenue grew 4.4% to 8.8 billion euro, the margin of 7.1% is low. Puma now plans to cut costs to boost profits.

Not-so-Flemish

Gimv once stood for “Gewestelijke Investeringsmaatschappij voor Vlaanderen” (Regional Investment Company for Flanders). It may be time for a name change, as the firm’s investments now span the Benelux, France, Germany, Austria, and Switzerland—far beyond Flanders. CEO Koen Dejonckheere even describes the company’s ambitions as “un-Flemish.” Think big. Look at the capital increase of 247 million euro that Gimv has launched. Shareholders can subscribe to one new share at 34.5 euro for every four shares they hold. It’s baffling because the intrinsic value of an old Gimv share was still 57.3 euro as of December 31. Conducting a capital increase at such a steep discount is hardly good advertising for the company or its management.

Did you know…

Gimv, in its early days (in the early 1980s), was the savior of the Belgian American Radio Corporation, better known as Barco? The investment company remained Barco’s reference shareholder for a long time until the stake was sold to Van de Wiele in 2014.

This article was translated from Dutch and was originally published on Spaarvarkens.be.