What Happened: Shares of online luxury marketplace Farfetch (NYSE: NYSE:FTCH) jumped 16.5% in the afternoon session after Sky News reported that the company is in discussions with Apollo Global Management (NYSE:APO) to secure emergency funding and stabilize its finances. While Apollo is one of the firms engaged in talks, sources emphasized that a deal is not guaranteed, leaving uncertainty about the form (debt, equity, or a mix) in which the new capital might be provided.
Is now the time to buy Farfetch? Find out by reading the original article on StockStory.
What is the market telling us: Farfetch's shares are very volatile and over the last year have had 69 moves greater than 5%. But moves this big are very rare even for Farfetch and that is indicating to us that this news had a significant impact on the market's perception of the business.
The previous big move we wrote about was 13 days ago, when the company gained 8% on the news that Citigroup analyst upgraded the stock's rating from Sell to Neutral amid increasing market volatility and speculation the company could be taken private. The analyst added that, "Near-term guidance has been removed, making it hard to assess the outlook for the business. On the other hand, we could see a potential take private offer with José Neves, who has 77% of the voting rights in the company. However, given there appears to be limited minority protection, we don't have confidence a takeover premium will be offered."
Farfetch is down 83.7% since the beginning of the year, and at $0.72 per share it is trading 90.4% below its 52-week high of $7.53 from February 2023. Investors who bought $1,000 worth of Farfetch's shares 5 years ago would now be looking at an investment worth $30.95.