(Bloomberg) -- Swedish real estate group SBB tumbled as much as 27% in Stockholm on Monday after an analyst writing for newspaper Dagens Industri advised readers to sell the stock.
Shares in Samhallsbyggnadsbolaget i Norden AB — as the firm is formally known — plunged the most since May last year following Richard Brase’s analysis into the company’s debt levels and its ability to generate positive cash flow. Its true value following a series of divestment deals and last month’s listing of its residential unit, Sveafastigheter AB, also raise questions, Brase said.
The stock fell 1.5 kronor to as low as 4.18 kronor, before recovering to 4.52 kronor at 11:21 a.m. in Stockholm. The company’s market value is now about 8 billion kronor ($750 million).
SBB last month spun off its housing division as part of a broader strategy to split the group into three along its community, education and residential portfolios. Before that, Chief Executive Officer Leiv Synnes was brought in to lead the real estate group after its share price went into freefall last year following a surge in borrowing costs and a spate of costly credit-rating downgrades.
That strategy has failed to arrest the slide in SBB’s share price, which continues to languish near record lows. Dagens Industri’s Brase, an influential columnist with retail stock investors in Sweden, questioned if the landlord will even survive next year.
SBB declined to comment on the piece when contacted by Bloomberg News. The company is in a silent period ahead of its third quarter report on Nov. 27, a spokesperson said by email.
Writing on LinkedIn in response to the article, Synnes said that companies do not have to be worse because they have higher debt. “It’s just another risk,” he said.
“And higher risk usually gives higher returns over time in a rational world,” Synnes added.
(Updates with response from SBB.)
©2024 Bloomberg L.P.