Global Opportunities Beyond the Radar

Why the Metlifecare Share Price Is Collapsing 19.25% Today

The Metlifecare Limited [NZX:MET] share price has plunged over 19% this morning after sell-off activity appears to be ramping up. This is in spite of government stimulus packages and sharp rebounds in the NZX 50 and other market indexes.

Metlifecare is one of New Zealand’s largest retirement village operators. The company’s share price previously reached a high of nearly $7.

Today it sits around $3.90.

The company had previously entered into a Scheme Implementation Agreement (SIA) with Asia Pacific Village Group Limited to buy Metlife at $7 a share.

It appears that Asia Pacific has termination rights in the event of a ‘material adverse change’.

Asia Pacific has advised they’re monitoring the pandemic ‘and the implication of it in New Zealand’. The group continues to assess the implications of COVID-19 and ‘reserves all of its rights under the SIA and at law ’.

Why has the Metlifecare share price fallen?

Although, according to the company, they are an essential service under COVID-19 rules, there are a number of factors that may be driving a sell-off.

The company advised to the market today:

In line with other operators in the sector, the company’s sales and settlements are expected to be significantly restricted during the Level 4 lockdown with a consequential adverse impact on new sales and resales revenues in the next quarter.

Investors appear concerned with new and multiple risks:

 Where could [NZX:MET] go from here?

Metlifecare is among many New Zealand businesses operating near the front line of this COVID-19 risk event.

Movement in the share price now depends heavily on the impact.

For now, the outlook for Metlifecare is one of heightened risk and uncertainty.

Whether this will drive further sell-off or attract a flurry of bargain hunters remains to be seen as events and announcements unfold.



Simon Angelo


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