The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has bounced back from its disappointing start to the week and has climbed higher today by around 0.5% to 5,493 points in late afternoon trade.
Unfortunately there have been four shares in particular which have gone against the grain today and have dropped sharply. Here's why:
Gage Roads Brewing Co Limited (ASX: GRB) shares have plummeted by around 40% to 4 cents after announcing a highly dilutive capital raising. Whilst that in itself is bad enough, the reason has no doubt left investors shell-shocked. Gage Roads will look to raise $10.1 million at 2.5 cents per share in order to buy back the 23.5% stake that Woolworths Limited (ASX: WOW) currently holds. The main attraction to the company in my eyes was the fact that Woolworths was both its largest customer and shareholder. Woolies has provided Gage Roads with production, supply and distribution support, as well as access to up to 25% of the total beer market in Australia. Without them on board I do have fears for the future of the company.
Gateway Lifestyle Group (ASX: GTY) shares have dropped over 14% to $2.24 after the company announced full year results which revealed statutory net profit after tax of $38.9 million. Unfortunately this result fell short of its prospectus target of $41.4 million and is likely to be partly to blame for today's decline. Another reason could be its subdued outlook for next year. For FY 2017 the provider of accommodation solutions for senior citizens has targeted underlying net profit after tax growth of approximately 5% excluding further acquisitions.
Slater & Gordon Limited (ASX: SGH) shares have been slammed today, dropping 13% to 48.5 cents after releasing its full year results to the market. Although the results were broadly in line with the guidance it recently released, clearly the market has not liked what it has seen now that it is finally able to scrutinise its books fully. One thing that stood out for me was that despite the massive loss and the continued bleeding of cash, the company's board of directors were awarded a substantial increase in fees.
Surfstitch Group Ltd (ASX: SRF) shares have crashed 50% today to just 11.5 cents after the company revealed a FY 2016 underlying net loss of $19.3 million. Underperformance from recent acquisitions and falling margins were largely to blame for the embattled retailer's disappointing result. Unfortunately FY 2017 doesn't look likely to be much better with the company forecasting only single digit growth in sales and an underlying EBITDA loss of between $2 million and $3 million.
