With the S&P/ASX 200 (INDEXASX: XJO) and the All Ordinaries (INDEXASX: XAO) both breaching all-time highs in July, it takes a pretty special stock of the canine variety to cop a 15% hit in the same month. But investors must be accustomed to AMP Limited (ASX: AMP) shares and the phrase "all-time low" going hand-in-hand by now. So what's next for this Icarus of the ASX?
AMP's terrible month
AMP shares have had a shocker month, on top of a shocker year. Flash back to exactly one year ago and it seemed then that AMP had already copped a convincing beating with a 35% collapse in the share price over the prior six months. But the August 2018 share price of $3.52 looks enviable now, as AMP tanked another 15% last month to start August 2019 at $1.80. The catalyst for July's disaster came from the announcement that the Reserve Bank of New Zealand (RBNZ) had blocked AMP's plans to sell its life insurance division (AMP Life) to UK-based Resolution Life.
This sale was the foundation of AMP's restructure/turnaround plan intended to provide a sorely needed injection of capital for the business.
As a result of the RBNZ decision, AMP announced that it will not be paying an interim dividend later this year and a sweeping reassessment of the company's future direction was necessary (in other words, AMP is back to square one).
What does the future look like for AMP?
In short, no one knows. AMP will no doubt have more to say on its future at some point, but it's hard to point to any other ASX company (certainly large company) that appears more rudderless at the present time. It's likely (in my opinion) that the board will attempt to raise additional capital in some capacity, but whether this involves issuing more shares, more bonds or any other solution isn't clear.
Foolish takeaway
Although as an investor I love a good bargain, I'm certainly staying away from AMP for the foreseeable future. For me personally, there are too many variables surrounding the future of this once-great company to make an informed decision on a buy. Maybe AMP shares are worth less than the sum of the parts right now, but I don't really want to find out.
