a2's shares have plunged 62% since August 2020... and Slater and Gordon aren't happy.
Background: a2 is the Aussie company that makes milk without using the A1 protein. Hence the name. The company's worth nearly $5 billion, largely due to its infant baby formula products.
What happened: Back in August 2020, a2 gave its full-year guidance forecasting great times ahead. But thanks to COVID making it difficult for overseas buyers to make purchases...the company's had to downgrade its earnings. Four times. And shares have plunged 62%.
What else: Here's where it gets a 'lil dicey. The company is now facing a class action led by Slater and Gordon, who reckon a2 were misleading their investors by not giving the full picture back in August.
💡Company guidance is an informal report that a public company gives its shareholders. It shows how much the company expects to earn in the upcoming period.
💡It's essentially the company's best guess at its upcoming earnings, based on information like sales pipelines, market conditions and upcoming spending.
💡But here's the thing: investors base their trading decisions on this company guidance. And, it can potentially trigger share price movements. In a2's case, Slater and Gordon say the company knew a bit more than they led on back in August, and they reckon they've got a case.
Sign up for Flux and join 100,000 members of the Flux family
