Zoetic (ZOE) Shares Plunge 15.7% Extending Last Week’s Losses, Will Support Hold?

Shares of CBD company Zoetic International PLC (LON: ZOE) fell 15.7% today extending the downtrend that begun last week after the company released disappointing half-year results on January 28.

Investors were disappointed to learn that the CBD products company only sold goods worth £54,554 in the six months ended September 30, 2020, compared to £1.2 million in revenues generated during a similar period in 2019.

However, the firm’s pretax losses narrowed to £1.2 million versus 2019’s £4 million loss as the firm completed the overall restructuring of its business during the same period.

The company narrowed its focus to CBD products only during the six-month period, hence the drastic drop in revenues, but this strategic move is likely to pay off significantly going forward.

Zoetic has inked a strategic deal to display and sell its CBD products via over 86,000 convenience stores in the United States, which gives it massive exposure within the country driven by the expansive network of such stores.

The CBD firm is also focused on expanding its global presence by inking similar deals in other parts of the world, which is likely to boost its revenues. A larger population shall have easy access to its products.

Zoetic is also growing its e-commerce infrastructure to serve a global audience and provide fast shipping and low response times to customers who prefer online shopping.

The latest downtrend has made Zoetic share price fall to trade near the crucial 60p support level, and it will be interesting to see if the level holds. A bounce from the level would indicate that a new bull trend might be underway.

Zoetic share price

Zoetic shares plunged 15.73% to trade at 63.2p having fallen from Tuesday’s closing price of 75p.