By Sneha Kumar
(Reuters) – Shares in Australian casino operator Star Entertainment rose 13.6% on Monday, with analysts citing the rise because investors bought shares at a cheaper price after it fell to a record low last week.
The stock rose to A$0.125, rising as much as 22.7% over the session. It fell to a record low of A$0.10 on Friday and has fallen almost 50% over the past two sessions.
“The rise in Star’s share price today is likely offsetting the decline and traders working the market rather than the fundamental news flow driving the share price rise,” said Grady Wulff, market analyst. of the Bell Direct trading platform.
“The combination of speculation about a turnaround and short positions are likely the drivers behind Star’s latest share price volatility and today’s rise.”
The company’s shares plummeted last week after a marked liquidity and cash crisis in the wake of an ongoing debt deal.
The company has already withdrawn A$100 million ($61.4 million) of its new A$200 million loan from lenders.
Star’s current financial situation makes it difficult for the company to meet the requirements for the second withdrawal, it said earlier this month as it explores other liquidity options.
Star said cash on hand at the end of December was A$79 million, up from A$149 million at the end of September.
“I think investors who see an opportunity to buy at these levels may be hoping that an outside party/company can be found to come and save the day for Star Entertainment. It remains to be seen if that possible scenario materializes.” said Tim Waterer, market analyst at KCM Trade.
Overall, Star Entertainment’s historically low price levels have caught the attention of buyers despite the current negativity surrounding the stock, he said.
Star stock fell more than 63% in 2024. It has lost about 34% this year so far.
($1 = 1.6289 Australian dollars)
(Reporting by Sneha Kumar in Bengaluru; Editing by Sonia Cheema)
‘ finance.yahoo.com ‘
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