Fortescue shares plummet to new low after US investor offloads $2 billion of stocks in massive dump
Fortescue shares plunged to their lowest since November 2022 after a US investor offloaded nearly $2 billion worth of stock in the Andrew Forrest-led company on Monday night.
Behind the mammoth block trade was Los Angeles-based financial services business Capital Group, which was offloading its Fortescue stake at $18.55 per share, according to Bloomberg, a close to 9 per cent discount on the stock’s Monday close price.
US investment bank JP Morgan was handling the trade.
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By continuing you agree to our Terms and Privacy Policy.By Bloomberg’s calculations, the sale represented a 3.2 per cent of Fortescue shares on issue.
Fortescue shares opened Tuesday down 8.6 per cent at $18.59 and continued their descent to $18.46. It’s the second time this year Capital Group has reduced its investment in FMG following a substantial selldown in June.
According to Bloomberg, Capital Group had about 152 million shares in FMG before the sale. Fortescue shares have fallen more than 38 per cent since January.
The selloff again puts Fortescue — founded by billionaire and chairman Andrew Forrest — under the investor spotlight after the company announced earlier this month that it would be reducing its headcount by about 700 white-collar staff.
The company had also indicated its goal of producing 15 million tonnes of green hydrogen by the end of the decade would not be met.
Fortescue’s energy chief Mark Hutchinson said higher electricity prices, the crucial power input needed in the process of breaking down water molecules, were too expensive to make hydrogen projects viable at this stage.
“As the green hydrogen market develops around the world, it is really clear that the cost of green power ... has to be in the $US30 range to make projects viable,” he said.
Meanwhile, in iron ore, the miner had a rare miss of its full-year export targets after a train derailment cut Fortescue’s transport link to the Herb Elliott Port in Port Hedland, the export gateway for its three iron ore mining hubs.
Fortescue lowered the bottom end of full-year guidance for this financial year to 190mt, with a top target of 200mt.
