Another of franchising throughout Australia. In the overseas markets,

    Another factor
that led to the fall in the value of JB HI-FI’s shares was the week consumer spending/sales
that year. One of the most significant contributors towards that was the
shallow rise in wages and then there were the Increased interest rates from
banks which too contributed in altering the consumer spending habits. Generally
considering the global events that occurred in 2017 also demotivated potential share
investors from investing into their company shares. Another factor that
contributed to the decline in its share prices were its industry downgrades.
Many of the similar retailers downgraded their customer support services last
year. In other words, the trading updates that they issued in 2017 were very
poor which included multiple cutbacks to save costs by negatively influencing
their customer service standards, price-beat sale policies. Such retailers were
inclusive of RCG Corporation Ltd, Oroton Group Limited, Myer Holdings Ltd and
Reject Shop Ltd. Due to such downgrades, many of the investors interpreted this
as a signal of an ailing industry (Newman, 2017).

   The share price of
Harvey Norman Holdings limited also faced a similar fate with its share value
falling as low as to 30% in 2017. Harvey Norman Holdings Limited is a retail
business which is franchised and has interests in property development like
many other major corporations. Some of its stores operate predominantly under a
system of franchising throughout Australia. In the overseas markets, the stores
are wholly owned. Such markets are inclusive of Malaysia and Singapore stores exclusively
owned by Harvey Norman. Moreover, The Rick Hart and Clive Peters brands are
also operated and owned by Harvey Norman (Russell, 2015). The latest ownership
structure is an essential factor to consider in Harvey Norman Holdings Limited
because it is a factor that affects the share price of a company. Harvey Norman
has an institutional ownership of 17.28% and in that case, the company has been
able to face some volatile movements in the share price when block trades are
executed by the institution in the open market. This is mainly when the amounts
of shares that are available are minimal. Such moves have been causing large
swings in the share prices. Another crucial group in the Harvey Norman Holdings
Ltd is the company insiders. Since this team is mainly concerned with the
management of the company its impact on the magnitude of the trading shares in
the market is minimal.

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    One of the most
prominent owners in this company is the individual insiders who have a 37.15%
stake. It has been extensively asserted that ownership of this kind negatively
affects the companies that possess a low PE ratio. The public holds a stake of
27.34% in the Harvey Norman Company. Such a size of ownership motivates the
retail investors since they have the collective power in making decisions on
some of the significant policy decisions for instance decisions on the
director’s appointments, executive compensation as well as acquisitions of
businesses. Such ownership levels equip the retail investors with the power to
make some of the initial policy decisions (Rowe, 2017). It, therefore, serves
as a positive sign for the investors who want to involve themselves in crucial
decision making in the company.

 

 

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