Kraft Heinz got squeezed.
And unfortunately, there doesn’t appear there’s anything to get excited about. Granted, it is Kraft Heinz. They’re not going out of business. But investors want nothing to do with it.
In fact, 3G Capital – the company’s second largest shareholder. – just sold 25 million shares of the stock at $28.44. That now reduces 3G’S stake by 9% to 245 million shares. While they have no intention of selling any more shares, according to CNBC, they can’t be happy.
The 3G disclosure comes after a string of write downs and financial issues.
In February, the stock took a hit after writing down more than $15.4 billion of Kraft and Oscar Mayer. Then it cut its dividend by 36% to 40, and even announced a subpoena from the U.S. SEC with regards to accounting policies.
In August, it fell to an all-time low after delaying the filing of its financial results, and wrote down the value of its business by another $1.22 billion.
“Unfortunately, the downtrend is very much intact,” Mark Newton, president and founder of Newton Advisors told CNBC. “We have lower lows, lower highs, and in technical analysis, you want to see at least some evidence of that trend being broken before you can take a real stand. Saying it’s oversold is just, unfortunately, not sufficient, even if it’s a well-known brand name, to say that I want to take a real stab at trying to buy.”
Unfortunately, with very few catalysts, more investors could jump ship here.