Key Takeaways
- • NextDC shares plunged 41.7 per cent on Wednesday to $5.35, a level last traded almost 10 years ago, after the ASX-listed data centre operator cut its earnings guidance.
- • The guidance downgrade followed extended delays in connecting the company's Melbourne M3 data centre in West Footscray to power networks.
- • Hedge funds were reported to be profiting from the sell-off, according to the Australian Financial Review (AFR).
- • The article notes brokers still view NextDC as a 'buy' despite the sharp decline, per the headline's characterisation of broker commentary.
Summary
NextDC shares fell 41.7 per cent on Wednesday to $5.35, according to the Australian Financial Review, as the ASX-listed data centre operator was forced to slash its earnings guidance. The company attributed the downgrade to extended delays in connecting its Melbourne M3 site to power networks. The M3 facility is located in West Footscray, on the outskirts of Melbourne's CBD.
The share price move was preceded by a trading halt placed on Tuesday, pending an update on the M3 project. When the stock resumed trading, it dropped to levels last seen almost a decade ago. The AFR reports that hedge funds are profiting from the decline.
Despite the sharp sell-off, the AFR headline indicates that some brokers continue to rate NextDC as a 'buy'. The primary article's available text is limited, so further detail on broker price targets, revised earnings figures and the expected timing of power connection at M3 is not available from this source.
The share price move was preceded by a trading halt placed on Tuesday, pending an update on the M3 project. When the stock resumed trading, it dropped to levels last seen almost a decade ago. The AFR reports that hedge funds are profiting from the decline.
Despite the sharp sell-off, the AFR headline indicates that some brokers continue to rate NextDC as a 'buy'. The primary article's available text is limited, so further detail on broker price targets, revised earnings figures and the expected timing of power connection at M3 is not available from this source.
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