Magellan’s shares are getting hammered again….
The post Magellan (ASX:MFG) share price crashes 23% after losing major contract appeared first on The Motley Fool Australia. –
The Magellan Financial Group Ltd (ASX: MFG) share price has returned from its trading halt with a thud.
In morning trade, the fund manager’s shares are down a disappointing 23% to a multi-year low of $22.46.
This means the Magellan share price is now down a whopping 58% since the start of 2021.
Why is the Magellan share price sinking again?
Investors have been selling down the Magellan share price this morning after it confirmed the loss of a major contract.
According to the release, Magellan has been notified by UK-based multinational wealth management business St James’s Place that it has terminated its mandate with the fund manager.
The release notes that St James’s Place’s mandate was a separate account and not an investment in any of Magellan’s retail global funds.
However, it represents approximately 12% of the company’s current annual revenues. As a result, the termination of the mandate at this point in the financial year is anticipated to have approximately a 6% impact on the revenues for FY 2022. Though, the timing also means the impact on the company’s half year results will be immaterial. No details have been provided in respect to the impact on its earnings in FY 2022.
Magellan’s announcement, which was lacking in detail, concluded by thanking St James’s Place for its partnership and support over many years.
A difficult period
Today’s news caps off a very difficult period for the Magellan share price.
Earlier this month the company announced the sudden and surprise exit of its Chief Executive Officer, Brett Cairns.
Once again, the announcement lacked details, advising that Mr Cairns was leaving for personal reasons. This sparked speculation of a major fall out in the boardroom.
And with Magellan recording significant fund outflows this year and its flagship fund underperforming its benchmarks materially, the company is arguably facing the most difficult period in its existence.
The post Magellan (ASX:MFG) share price crashes 23% after losing major contract appeared first on The Motley Fool Australia.
Should you invest $1,000 in Magellan right now?
Before you consider Magellan, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Magellan wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 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. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.