Pandora A/S (PNDORA), the Nordic region’s biggest jewelry maker, fell to the lowest price in six weeks in Copenhagen trading as investors speculate another share sale by the company’s private equity owners may hurt the stock price.
Pandora fell as much as 4.3 percent to 173.70 kroner, the lowest intraday level since May 1. The stock lost 3 percent to 176.1 kroner at 12:39 p.m. in the Danish capital, with trading volumes at 52 percent of the three-month daily average.
Prometheus Invest ApS said on May 22 that it sold 13 million shares in Pandora to institutional investors at a price of 200 kroner a share, the bottom of an indicated range. The stock price of the Glostrup, Denmark-based jeweler plunged 11 percent on the day of the announcement and has since dropped further, losing an additional 12 percent.
“There’s a perception in the market that 200 kroner may be a new ceiling for the share as the owners may step in and sell a lot of their stock when the price gets close to that level again,” Jonas Guldborg Hansen, an analyst at Jyske Bank A/S (JYSK), said by phone. “This so-called stock overhang is making Pandora an investment that has limited upside potential.”
Prometheus, which is controlled by Copenhagen-based private equity-fund Axcel and Pandora’s founding Enevoldsen family, still has a 40.9 percent stake in the jeweler.
“We saw how the market reacted last time the owners sold and they still hold a lot of shares,” said Guldborg Hansen, who is based in Silkeborg, Denmark and has a reduce rating on the stock. The analyst added that the share price has also been hurt by the general decline in global stock markets this month.
Pandora on May 14 reported first-quarter profit and revenue that beat analyst estimates. The company’s net income exceeded the average net income estimate in nine of the last 10 quarters, according to data compiled by Bloomberg.
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