Just days after the Fortescue Metals Group Limited (ASX: FMG) share price cracked a new 52-week high, the stock is plummeting to come in as one of the S&P/ASX 200 Index (ASX: XJO)'s worst performers.
The Fortescue share price is down 2.68% at the time of writing, trading at $22.19 – 4% lower than the 12-month high it reached in Friday's session.
For comparison, the ASX 200 is enjoying a day in the green. It's up 0.77% right now while the S&P/ASX 200 Materials Index (ASX: XMJ) is nearly flat, rising 0.06%.
So, what's going so wrong for the iron ore giant on Monday? Let's take a look.
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Fortescue share price tumbles on Monday
The Fortescue share price is tumbling into the week amid news China has vowed to crack down on illegal activity capable of driving up iron ore prices, the Sydney Morning Herald reports.
Such activities include "fabricating and disseminating information on price increases, hoarding and price gouging", the nation's National Development and Reform Commission said, via the publication.
It comes as the price of the steel-making ingredient hit a seven-month high of more than US$122 a tonne on Friday – a 4.9% week-on-week increase.
The material's rising value was likely partially driven by China's reopening and moves to bolster the nation's real estate sector.
The Fortescue share price is far from alone in the red on Monday. Here's how some of the market's other iron ore favourites are performing:
- The BHP Group Ltd (ASX: BHP) share price is down 0.18% right now, trading at $49.55
- The Rio Tinto Limited (ASX: RIO) share price is also down 0.44% at $121.75
Shareholders reportedly concerned about Fortescue governance
Meanwhile, Fortescue founder and executive chair Dr Andrew Forrest is back in the headlines this week, with the Australian Financial Review reporting some of the company's major shareholders are concerned about its governance amid an exodus trend among its executives.
Chief financial officer Ian Wells was the latest leader to announce his departure from the company, resigning last week.
Its rotating door of leaders has reportedly left shareholders uneasy about Forrest's control over the company. As well as serving as executive chair, the billionaire has a 30% stake in the ASX 200 iron ore giant.
The publication also alleges that non-executive director and former Olympian Lord Sebastian Coe, who indirectly bought $98,621 worth of the company's stock last month, did so amid pressure from investors. Shareholders were quoted as pushing Forrest to ensure Coe had "skin in the game".
