Why are Brainchip shares crashing 19% today?

What's going on with this stock today? Let's find out.

| More on:
a man holds his arms out and shrugs his shoulders as if indicating he doesn't know the answer to a question he's been asked.

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

Brainchip Holdings Ltd (ASX: BRN) shares are having a day to forget on Wednesday.

In afternoon trade, the struggling semiconductor company's shares are down 19% to 25.5 cents.

Why are Brainchip shares crashing today?

Today's decline appears to have been driven by the release of an announcement after the market close on Tuesday.

That announcement was a ceasing to be a substantial holder notice, which revealed that a major shareholder and former executive has sold down his holding.

In July last year, the company revealed that co-founder and vice-president of engineering, Anil Mankar, was planning to retire.

Commenting on the exit at the time, Brainchip's under-fire CEO, Sean Hehir, said:

Anil was instrumental in developing Akida IP, our chip implementations and creating our world class engineering department. All of us at BrainChip wish Anil a very happy and well-deserved retirement. I want to personally thank Anil for all his hard work and leaving us with such a strong and dedicated team to carry on the work Anil and Peter van der Made started.

Mankar has since retired and left the company as expected. And while that was a bitter blow to investor confidence, news that he has been selling down his holding could be the final nail on the coffin for some investors.

Co-founder sells down holding

The ceasing to be a substantial holder notice reveals that Anil Mankar sold a total of 29,999,833 Brainchip shares, taking him comfortably below what is required to be classed as a substantial shareholder.

Mankar received a total consideration of $14,731,169 for the sales.

It is worth noting that now the co-founder is no longer classed as a substantial shareholder, he is free to sell shares without reporting them.

This could potentially mean that more shares are being offloaded today. Especially given the selling pressure its shares are under. But that is of course impossible to know.

But what is possible to know is that this doesn't bode well for investor sentiment. The market may well be thinking that if the co-founder really believed in Brainchip's future, he would want to be part of it as a major shareholder.

Do brokers think Brainchip is a buy?

None of Australia's brokers cover Brainchip, which is another red flag. Especially given that companies with much smaller market capitalisations have coverage from multiple brokers.

This could be a sign that the broker community doesn't take Brainchip seriously and feels it isn't investment grade. Time will tell if that is the case.

Should you invest $1,000 in The A2 Milk Company Limited right now?

Before you buy The A2 Milk Company Limited 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 The A2 Milk Company Limited 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 James Mickleboro 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

group of traders cheering at stock market
Technology Shares

What drove a 10% surge in ASX 200 tech shares last week?

The ASX 200 roared to a 2-month high on Friday, with tech shares leading the 11 market sectors last week.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Technology Shares

Why is the Block share price crashing 33%?

This payment giant's shares are being hammered today. But why?

Read more »

A young man pointing up looking amazed, indicating a surging share price movement for an ASX company
Technology Shares

These ASX 200 tech stocks could rise 20% to 35%

Goldman Sachs is tipping these shares to rise strongly from current levels.

Read more »

A corporate team or board stands together and looks out the window.
Technology Shares

WiseTech shares charge higher on $3.5b acquisition news

This tech stock is ending the week positively. But why?

Read more »

A man leans forward over his phone in his hands with a satisfied smirk on his face although he has just learned something pleasing or received some satisfying news.
Technology Shares

3 reasons to buy this $25 billion ASX 200 tech stock today

A top expert forecasts more outperformance from this fast-growing ASX 200 tech stock.

Read more »

Lines of codes and graphs in the background with woman looking at laptop trying to understand the data.
Technology Shares

Why is the Brainchip share price crashing 9% today?

The semiconductor company is being sold off on Tuesday. But why?

Read more »

A man with a wide, eager smile on his face holds up three fingers.
Technology Shares

3 reasons this sold-off ASX 200 share is primed for a big rebound

A leading expert believes this ASX 200 share is well placed to outperform.

Read more »

a man surrounded by huge piles of paper looks through a magnifying glass at his computer screen.
Technology Shares

I did some research on Siteminder — Here's what you should know

The big questions I'm monitoring for answers.

Read more »