Why did the Aussie Broadband share price fall 20% in June?

The telco had a difficult month.

| More on:
A man sitting at a computer is blown away by what he's seeing on the screen, hair and tie whooshing back as he screams argh in panic.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Aussie Broadband Ltd (ASX: ABB) share price had a difficult month in June.

To finish the month, shares in the telco fell more than 20% into the red, bringing losses to over 30% for the year to date.

In broad market moves, the S&P/ASX 200 Communication Services Index (ASX: XTJ) also slipped 3.5% into the red last month and is down 16% since January.

What's up with the Aussie Broadband share price?

Despite no news from the company in June, investors sold off Aussie Broadband shares at pace last month in tandem with the broad sector and the wider market.

The last we heard from the telco was back in May regarding its Q3 FY22 update. It reported a 42% year on year increase in total active broadband services to 697,083.

These figures weren't inclusive of Aussie Broadband's acquisition of fellow telco provider Over The Wire on 15 March 2022.

Folding in the acquisition and the company expects "annual cost synergies of between $8–$12 million within 3 years".

Over The Wire is expected to deliver approximately $11 million in EBITDA "for the 3.5 months that ABB has owned OTW" in FY22.

Market punishment

Investors weren't satisfied with the announcement at all and sent the share tumbling.

Just a week earlier investors had piled into Aussie Broadband shares at pace, driving prices to a 52-week high of $5.95 on 21 April.

However, shares plunged more than 28% on the day of the trading update announcement.

The market underwent a serious correction in June and ASX telecommunications shares weren't immune to downside.

The broader communications sector was hit equally as hard and the XTJ fell to a 52-week low on 17 June.

As seen on the chart below, the Aussie Broadband share price followed suit soon after. It is now down 29% this year to date but has clipped a 13% gain in the last 12 months.

TradingView Chart

Should you invest $1,000 in Bwp Trust right now?

Before you buy Bwp Trust shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Bwp Trust wasn't one of them.

The online investing service he’s run for over 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 may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Communication Shares

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Communication Shares

Telstra share price dips amid BIG leadership news

Telstra released a major leadership announcement on Monday.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Communication Shares

Why are News Corp shares trading 4% higher today?

Investors respond to News Corp’s quarterly results announcement.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Communication Shares

Why this expert is calling time on Telstra shares

A leading expert forecasts tougher times ahead for Telstra shares. Let’s find out why.

Read more »

man looks at phone while disappointed
Communication Shares

$10,000 invested in Telstra shares at Christmas is now worth

Should you have put $10,000 into the telco giant before the Christmas break? Let's find out.

Read more »

A woman sits on sofa pondering a question.
Broker Notes

Battle of the online classifieds: Should I buy Car Group or Seek shares?

Brokers rate both shares highly.

Read more »

A woman standing in a blue shirt smiles as she uses her mobile phone.
Communication Shares

Telstra is rewarding its shares investors today

Here's how.

Read more »

A couple makes silly chip moustache faces and take a selfie on their phone.
Communication Shares

$10,000 invested in Telstra shares 5 years ago is now worth…

Buying Telstra shares in March 2020 would have delivered some term-deposit-busting returns.

Read more »

A cute little kid in a suit pulls a shocked face as he talks on his smartphone.
Communication Shares

TPG share price higher following ACCC decision

TPG shares are lifting on Thursday after the ACCC issued a statement regarding a proposed asset sale to Vocus Group.

Read more »