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Heiq Shares Crash 21.9% Despite Releasing an Upbeat Trading Update for FY 2020

Simon Mugo trader
Updated 22 Jul 2021

Practice Stock Trading
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Shares of Heiq PLC (LON: HEIQ) crashed 21.9% after the innovative Swiss textiles company released a positive trading update for the financial year ended 31 December 2020.

The company said that it expects revenues for its 2020 financial year to beat market estimates driven by the robust performance of its core portfolio products led by strong sales of HeiQ Viroblock, an antimicrobial technology launched in response to the coronavirus pandemic.

It was not yet clear why Heiq shares sold off as much as they did, with the only explanation being that investors were unwinding their long positions following the massive rally that started in December 2020.

The firm’s shares were trading at 120p in early December before rallying over 100% to yesterday’s closing price of 243p. Some long-term investors were likely selling some of their shares today to book profits given that the company started trading on the LSE on 7 December 2020.

Heiq noted that its viroblock technology has now been used in over 1 billion face masks leading to its winning the Swiss Technology Award in Q4 2020.

The firm also expects its operating profits for FY 2020 to be in line with market expectations despite the company's record number of investments in H2 2020. Heiq’s 2021 financial year is off to a great start, and the company is confident about its prospects.

HeiQ co-founder and CEO Carlo Centonze said: “2020 was a milestone year for HeiQ, characterised by rapid growth and innovation. Not only did we respond quickly to the COVID-19 outbreak by bringing HeiQ Viroblock to market early, we did so while also delivering robust sales growth for many existing products within our 200-strong portfolio of novel textile technologies. These achievements solidified our position as a profitable and fast-growing pioneer in the $24 billion textile chemicals market.”

Heiq share price

Tradingview chart of Heiq share price 26-01-2021

Heiq shares fell 21.94% to trade at 185p having fallen from Monday’s closing price of 237p.

Should you invest in Heiq shares? Heiq plc shares are traded on the AIM market of the London stock exchange (the alternative investment market) which is the sub market specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Heiq plc shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading