Tyro's share price has been falling due to a combination of factors, including the failure of a proposed takeover, competition from international players, and concerns about the company's revenue reliance on payments.Specifically, the collapse of the Potentia takeover bid in May 2023, coupled with Tyro's declining transaction values, has significantly impacted investor confidence.
Here's a more detailed breakdown:
Failed Takeover Bid:
Potentia, a private equity firm, had been in talks to acquire Tyro, but the deal ultimately fell through.This news, along with the company's update on declining transaction values, caused a sharp drop in the share price.
Increased Competition:
Tyro faces increasing pressure from larger international players like Block and Zeller.This heightened competition has put pressure on margins and market share.
Reliance on Payments Revenue:
Despite efforts to diversify, Tyro remains heavily reliant on revenue from payments.This makes the company vulnerable to fluctuations in the payments landscape and competition from alternative payment solutions.
Market Concerns:
The market has also been concerned about the company's ability to achieve its target of 20% of gross profits from banking activities by FY27, given the relatively small contribution from this area in FY24.
Recent Share Price Decline:
Shares in Tyro have fallen sharply in the past year, with a recent decline of 15.2% as of noon AEDT on a particular Tuesday.This decline is partly due to the fallout from the failed takeover bid and concerns about the company's performance.
Tyro management need to set solid financial goals and meet and exceed them over the next 18 months and they other companies will be interested in a take over.
TYR Price at posting:
73.3¢ Sentiment: Hold Disclosure: Held
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