Kogan (ASX:KGN) share price falls amid remuneration second strike

Kogan's board came under fire at its AGM…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It certainly was a rollercoaster of a day for the Kogan.com Ltd (ASX: KGN) share price on Thursday.

The ecommerce company's shares rose 3.5% to $9.19 shortly after the release of its annual general meeting update. However, once everything was absorbed, it didn't take long for the Kogan share price to give back those gains and more.

The company's shares ultimately ended the day over 4% lower at $8.49.

A woman screams and holds her hands up in frustration.

Image source: Getty Images

What happened to the Kogan share price on Thursday?

There appear to have been a few catalysts for the volatility in the Kogan share price on Thursday.

One was its trading update. Although Kogan spoke about further revenue growth during the first four months of FY 2022, this hasn't translated into profit growth.

Kogan revealed that its adjusted EBITDA (including Mighty Ape) was down 61% year to date to $12.4 million. Excluding Mighty Ape, adjusted EBITDA was down 70.3% to $9.5 million over the prior corresponding period.

Given that Kogan reported adjusted EBITDA (including Mighty Ape) of $10.8 million for the first quarter, this means it only added $1.6 million of EBITDA in October. That compares to a first quarter average of $3.6 million per month. And this is despite the company advising that it had resolved previous inventory pressures during the first quarter, reducing warehousing costs.

Shareholders vote against the renumeration report

Another factor that could be weighing on the Kogan share price is news that shareholders have dealt the company a second strike after voting against the adoption of its renumeration report.

Under the second strike rule, if shareholders vote down a company's executive remuneration package two years in a row, the board may be voted out of office. A total of 42.19% votes were cast against the report, similar to last year's annual general meeting.

However, fortunately for the Kogan Board, shareholders decided against spilling the board, with 97.56% of votes cast against it. But clearly a warning shot has been fired in the direction of the Kogan board.

The Kogan share price is down 56% since the start of 2021.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Kingsgate, Neuren, Newcrest, and Pushpay shares are rising today

These ASX shares are avoiding the market selloff on Tuesday.

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Neuren, Northern Star, Race Oncology, and Westgold shares are storming higher

These ASX shares are starting the week in a positive fashion.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Share Gainers

Why APM, Macquarie Telecom, Northern Star, and Origin shares are rising today

These ASX shares are having a strong session despite the market selloff.

Read more »

Two boys with cardboard rockets strapped to their backs, indicating two ASX companies with rocketing share prices
Share Gainers

Catch these fast-rising 2 ASX shares before it's too late: Celeste

This pair of stocks rocketed up in February during reporting season, but are still great value for those willing to…

Read more »

three businessmen high five each other outside an office building with graphic images of graphs and metrics superimposed on the shot.
Share Gainers

Why Arafura, Myer, Volpara, and Xero shares are zooming higher

These ASX shares are making their shareholders smile on Thursday.

Read more »

medical asx share price represented by doctor giving thumbs up
Healthcare Shares

Guess which ASX biotech stock just rocketed 29% on big FDA news

The ASX healthcare share is attracting investor interest following FDA approval for its targeted cancer therapy compound.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Mesoblast, PolyNovo, Pushpay, and Weebit Nano shares are charging higher

These ASX shares are having a strong session despite the market selloff.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why InvoCare, Pentanet, Sayona Mining, and Weebit Nano shares are storming higher

These ASX shares are having a strong session on Tuesday.

Read more »