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Why Shares Rallied 50% after Tuesday’s Massive Crash

Simon Mugo trader
Updated 26 Oct 2022

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Key points:

  • shares rallied 50% after Tuesday’s massive crash.
  • However, the rally pales compared to yesterday’s over 90% plunge.
  • The company is now teetering on the edge of administration.

The Made.Com Group PLC (LON: MADE) share price rallied 50% today, recouping a small part of yesterday’s massive over 90% crash that saw it fall from 7.8p to 0.5p. Therefore, today’s rally represents a minor gain compared to yesterday’s losses as the company teeters on the brink of administration.

The online furniture company announced yesterday that it had yet to receive any firm offers from the parties that had expressed interest in acquiring its entire issued and being issued share capital by the set deadline.

Also read: The 12 Best Shares To Buy As A Beginner. warned investors that it might be unable to continue operating as a going concern once its current cash reserves are exhausted since it had yet to receive any funding offers from the interested parties. The eCommerce company also halted any new customer orders as a sign of its precarious position.

The company’s board said it would continue looking for ways to preserve shareholders’ and creditors’ value and will communicate any further steps in due course. shares are trading below 1p in a catastrophic crash that saw the company’s shares plummet from their listing price of 200p in June 2021, valuing it at £775 million. was a significant beneficiary of the pandemic lockdowns that saw many people engage in home improvement projects, including upgrading their furniture as they adjusted to working from home. However, the firm fell into problems earlier this year amid record-high inflation that has seen many consumers suspend unnecessary spending.

The rising cost of living triggered by high energy prices and record-high inflation has forced many consumers to curtail their spending on items such as furniture, which is a purchase that can be postponed until one has enough cash to acquire the same. is just one of the many companies that have struggled to maintain the sales momentum seen at the height of the pandemic. Unfortunately, the current uncertain macro environment has worsened the situation, as most businesses report declining consumer spending.

*This is not investment advice. share price. share price 26-10-2022
Source: IG

The shares rallied 50% to trade at 1.0p, rising from Tuesday’s price of 0.5p.

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