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Why didn’t Flight Centre (ASX:FLT) shares enjoy any Christmas cheer in December?

Is this why the Flight Centre share price has dipped this month?
The post Why didn’t Flight Centre (ASX:FLT) shares enjoy any Christmas cheer in December? appeared first on The Motley Fool Australia. –

The Flight Centre Travel Group Ltd (ASX: FLT) share price has struggled over the final month of 2021.

The difficult period came as short interest in the company’s shares remains high. In fact, it’s continued to hold the title of the most shorted stock on the ASX throughout this month.

As of Thursday’s close, Flight Centre shares were trading at $17.73. That’s 0.1% lower than at the start of December.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 3.5% over the same period.

Let’s take a closer look at what might have weighed on the travel agency’s shares this month.

An acquisition fails to excite

Flight Centre shares have slumped this month despite the company announcing non-price sensitive news of an acquisition.

The company purchased technology company, Compli.ai for its browser extension, Shep. It plans to integrate Shep into its flagship business travel division, FCM travel management.

According to Flight Centre, Shep will see FCM place its own content on third party websites used by corporate customers. Doing so is expected to enhance consistency and deliver better control, duty of care, sustainability, and communication to its customers.

More COVID-19 outbreaks

The acquisition didn’t appear to excite the market. Perhaps investor enthusiasm for Flight Centre shares might be being curbed by grounded flights and Omicron outbreaks.

While Prime Minister Scott Morrison last week declared Australia wasn’t going back to “shutting down people’s lives” by implementing lockdowns, outbreaks of the COVID-19 variant caused New Zealand to delay reopening its borders and other countries to reinstate COVID-19 restrictions.

Additionally, as The Motley Fool Australia reported earlier this week, airlines around the world are struggling to staff flights as flight crews are forced to isolate after encountering people infected by COVID-19.  

Such an instance was echoed in Australia over the Christmas period. The Australian reported some airlines were forced to cancel multiple domestic flights on Christmas Eve after staff were identified as close contacts.

Flight Centre share price ups and downs

On top of that, some experts have recently expressed concerns that Flight Centre – and its share price – will struggle to break even in the future.

Whether all this has, or has not, weighed on Flight Centre shares is impossible to say.

Still, the dip hasn’t been enough to plunge it into the long-term red. Right now, the company’s stock is trading for 10.5% more than it was at the start of 2021.

The post Why didn’t Flight Centre (ASX:FLT) shares enjoy any Christmas cheer in December? appeared first on The Motley Fool Australia.

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More reading

How are ASX 200 travel shares faring over the holiday season?

ASX travel shares in focus on global flight cancellations

These are the 10 most shorted ASX shares

What’s the outlook for the Flight Centre (ASX:FLT) share price in 2022?

Here’s what’s happening to the Flight Centre (ASX:FLT) share price today

Motley Fool contributor Brooke Cooper 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 recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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