value: The bank set its target price indicating the likely future value of the shares at zero, according to The Guardian. As the City digested the note, shares in the company nosedived to 11.8p, cutting the company's stock market value by 120m, to 180m. Wall Street bank Citigroup produced a research note advising investors to sell shares in the 178-year-old tour operator, which reported a 1.5bn loss earlier this week, citing a drop in holiday bookings due to Brexit uncertainty. Thomas Cook shares Citigroup analyst James Ainley said he believed the company would soon have zero equity value because of an anticipated rise in its debts, which already stand at 1.2bn. The latter measure, taken recently by distressed companies such as Interserve and Debenhams, involves lenders writing off debt in exchange for taking ownership of the company's shares, which would wipe out shareholders' investment. He said this was because the company would most likely have to be rescued via an issue of new shares, which could dramatically reduce the value of existing stock, or a debt-for-equity swap.
(news.financializer.com). As
reported in the news.
Tagged under value, shares topics.