Boohoo backtracks on bonus plan, AstraZeneca hit by trial setback and Persimmon down on talk of Cala acquisition

Nvidia

“Investors have had time to think about their portfolios over the long weekend and Nvidia’s strong results last week have clearly given individuals enough confidence to want to own more shares,” says Dan Coatsworth, investment analyst at AJ Bell.

“The stock has been bid up to a new record high potentially because the latest messages from the company contain all the right notes that investors want to hear. The business is doing incredibly well, there are so many opportunities to keep growing, and the AI theme still has legs. When the song is that catchy, investors want to keep humming it all day long.”

Ocado

“Someone clearly thinks there is value in Ocado’s shares given how the stock jumped more than 8% on no news. This follows a strong rally last week, implying that something is going on. Whether it’s an activist investor on the register, a return of takeover speculation, or Ocado joining the meme stock craze, it’s not currently clear what exactly is driving the current rally.

“Ocado’s shares often jump when investors are in a risk-on mood, but it doesn’t feel like that is the case at present. In Goldilocks terms, risk appetite feels about normal, not too hot and not too cold. That means all eyes will be on the company this week as the market tries to make sense of what’s happening.”

Boohoo

“Boohoo has retreated with its tail between its legs after being publicly shamed over plans to reward founders Carol Kane and Mahmud Kamani and CEO John Lyttle with sizeable bonuses despite the business racking up losses in the 12-month period to February 2024.

“The stage was set for a big shareholder revolt at the AGM in less than a month’s time but the crisis has now been averted after Boohoo backtracked on the bonus plan.

“What was it thinking in the first place? The idea of doling out the cash to line the pockets of the bigwigs when Boohoo has gone into reverse with earnings is madness. The whole point of bonuses is that senior managers and directors share the gain when things are going well and share the pain when they aren’t. The heads you win, tails you win mentality no longer cuts the mustard.”

AstraZeneca

“Creating new treatments is incredibly hard work and companies often go through years of trials, tweaking formulas and experiencing setback after setback before making a breakthrough. AstraZeneca has been working hard to progress a lung cancer treatment but the latest results imply it isn’t effective enough in the current form.

“Clearly disappointing for the company and for anyone suffering from the condition, nonetheless AstraZeneca is likely to keep making alterations and doing its very best to get a successful outcome over the line.”

Persimmon

“When a share price falls on talk it might buy a rival company, you know that investors don’t like the mooted deal. Persimmon’s shares fell more than 3% on speculation it might bid £1 billion for Cala Group, a housebuilder put up for sale by current owner Legal & General.

“The best time to make acquisitions is when market conditions are tough as there is a chance of snagging a bargain. However, investors often view such situations negatively because they want a company to preserve cash during harder times, often being short-term in their thinking to not realise the long-term benefits.

“There is also the fact that competition authorities want to avoid the big players being too dominant and so any chunky takeover involving Persimmon as the predator could find itself tangled up in red tape.”

These articles are for information purposes only and are not a personal recommendation or advice.