Interesting to see what happened to Frasers Group (Sports Direct) share price after Mike Ashley apology
Mike Ashley has been held up as an absolute disgrace in most people’s eyes when it comes to this current crisis we all face.
One of a small group of very high profile and very rich people, seen as only interested in looking after themselves, rather than those they employ and the general public at large.
Out of the blue though, early on Friday morning he published an open letter (see below) claiming he had made some mistakes/misunderstandings which he apologises for.
In his letter, Mike Ashley said:
“Our intentions were only to seek clarity from the Government as to whether we should keep some of our stores open; we would never have acted against their advice.
“On top of this, our communications to our employees and the public on this was poor.
“To reiterate, I am deeply apologetic about the misunderstandings of the last few days. We will learn from this and will try not to make the same mistakes in the future.”
After the letter was published, we asked people this question in a poll: ‘Is Mike Ashley genuine with his apology letter, or is it simply PR damage limitation?’
The results of that poll were stunning, less than 1% who took part in the poll thought this was genuine from Mike Ashley, indeed only six people in total voted in his favour.
How though did the stock market react to Mike Ashley going public with this apology?
Well the open letter apology was put out by Mike Ashley before the London Stock Market opened on Friday morning.
This is how the Frasers Group (Formerly Sports Direct International Group) share price reacted after the Mike Ashley apology:
The share price had closed at 255.20p on Thursday night and by close of business on Friday, it had dropped a massive 17.63% (in comparison, the FTSE 100 dropped by 5.25% on Friday), a fall of 45p.
It doesn’t exactly suggest investors are convinced that Mike Ashley’s belated action/apology will be enough to help prevent potential disaster for his retail empire. So many people vowing never to give their money to companies owned by those who they believe to have acted badly during this crisis, even when things return to some kind of normality.
This is bad news that Mike Ashley could definitely have done without, as it comes on top of a massive crash already in the Frasers Group / Sports Direct share price. It was 503.00p on 20 February 2020, which means that now only five weeks later it has dropped by almost 60%, with this current health/safety crisis impacting on so many businesses.
However, looking ahead, which of these businesses will be able to bounce back successfully?
This is the full Mike Ashley letter published on Friday 27 March:
Will this desperate face/money saving move by Mike Ashley prove to have been too little too late?
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