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If you want a case study in investor expectation management, look no further than HotCopper user’s reaction to WEB Travel Group’s (ASX:WEB) latest news.
The recently spun-off entity – after breaking up with the larger Webjet Group – has today confirmed its 1H25 results will be delayed on short notice.
Shares have been suspended at $4.50.
Deloitte, WEB Travel now says, is still formulating an audit of those results.
Earlier this week, the company issued a trading halt ahead of an adjustment to FY25 projections. Deloitte wasn’t an issue at the time.
What WEB Travel says
“The trading halt is requested to enable Web Travel Group to manage its disclosure obligations in relation to potential adjustments to its prior year financial statements,” the company wrote.
The travel distributor added this wouldn’t hurt 1H25 results. And yet, concern raised its head above the waters of complacency.
This was evident in that the news of that trading halt on Monday was taken badly by some HotCopper users in the relevant announcement thread.
Worth noting: For the forums, unexpected trading halts rousing concerns of a capital raise isn’t uncommon. Nor an unfair response for any interested investors notoriously enthusiastic for high-risk mining juniors.
HotCopper users weigh in
“They have done this in the past for a capital raising, so it is either this or a takeover,” user StefanRalph wrote, attempting to read the tea leaves.
“What does it mean? Trading halt before announcing 1H25 results on Wednesday 20 November 2024,” user Takizawa2 wrote.
“It did say [it] won’t impact the 1H25 results …. but doesn’t look good,” user Uranium69 added.
At least one user questioned the nature of WEB Travel halting, but not Webjet (ASX:WJL), given they were recently the same company.
“Why not put WJL into a trading halt as well. They were consolidated financials,” Stonkholder mused.
Key to much user commentary was that, at the time, the B2B company suggested those changes would not be material.
But then on Wednesday – or, today if you prefer – WEB Travel has entered a suspension which could last for up to nine days, given it expects to report its 1H25 results no later than Friday, November 29.
Again on Wednesday, WEB asserted changes to projections would not be material.
But the sudden finger-pointing at Deloitte has caught HotCopper users off guard – and looking at the comments on Wednesday in the relevant announcement thread, it’s fair to say users are net bearish on the news.
(There’s also the obvious question of why, then – if the changes aren’t material to projections – do they need a halt and suspension? Especially seeing as the announcement of delay prior to the suspension notice wasn’t price sensitive? It’s not hard to see where users are coming from.)
Shorter conspiracy unfounded
One user suggested – very common for the HotCopper forums – that shorters were to blame.
Sometimes that is the case, sometimes it isn’t.
“No way, it is those shorters again, according to some members. Getting worse by the minute,” user CbrMaroon wrote – without citing what those members are.
Just to clarify – and I’ll note the data lags by a few days – but shorts in WEB have actually recently declined, despite an uptick. The stock was shorted 6.17% in mid-October; after a small jump in mid-November, they’re currently at 2.95%.
So increased pressure from short sellers doesn’t really check out, here.
We’ll just have to wait and see what happens.
But the bigger story is one of a case study – it’s widely accepted markets love knowing what to expect (read: certainty,) and for a $1.7B market cap company, surprise finger pointing at a Big 4 accounting firm is more than enough to rattle feathers.
Keep an eye on what shares do whenever the stock starts trading again – the stock plummeted on October 11 from $7.03/sh to $4.53.
WEB last traded at $4.50/sh.
Join the discussion: See what HotCopper users are saying about WEB Travel and be part of the conversations that move the markets.
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