LONDON: Shares in troubled British tour operator Thomas Cook collapsed on Friday after Citigroup reportedly warned in a broker note that the stock was worthless.
The company’s share price dived 27.26% to just 14.26 pence in midday deals on the London stock market.
“Thomas Cook shares have plunged again, this time after being on the receiving end of a sell recommendation from Citigroup, with a zero pence target price,” said analyst Michael Hewson at traders CMC Markets UK.
“Yesterday, management had stated that they had received multiple bids for its airline assets.
“The problem the company is now facing given its huge debts is that they may have to sell these assets at firesale prices, as investors and markets lose confidence of the ability to turn the business around,” Hewson added in a note to clients.
The news came one day after Thomas Cook revealed that first-half losses widened on a major writedown, caused in part by Brexit uncertainty that has delayed summer holiday bookings.
The firm posted a net loss of £1.474 billion (US$1.893 billion) in the six months to March 31, as customers also put off trips abroad last winter.
The loss after tax, after a writedown of £1.1 billion, compared with a net loss of £254 million in the first half of its 2017/18 financial year.