Thomas Cook’s largest shareholder has dismissed the sharp fall in the company’s share prices as an “overreaction”.
Fund manager Invesco lifted its stake in the company from 14.2% to 15.2% – a vote of confidence followed by Thomas Cook’s chairman purchasing £80,400 of shares and the issuing of positive research notes by numerous stockbrokers.
Shares closed at 34.5p, up by 11.5p.
Invesco’s global equities fund manager, Stephen Anness, said: “Much of what we heard from Thomas Cook last week was a repeat from what we already knew – that trading suffered from the exceptionally hot summer. That was exaggerated by the unexpected change to accounting, a change we very much approve of as it more clearly reflects the underlying business. The market has taken fright, but from what we see the fundamentals remain robust. From our conversations with the company, the balance sheet and liquidity is intact. This seems an overreaction.”
Supporting this was a “buy” note from Jefferies International, a US investment banking firm, which backed Fankhauser’s confidence that Thomas Cook could avoid fundraising.
Yet debt ratings agency Moody’s downgraded its outlook on Thomas Cook, moving it from “stable” to “negative” and stating: “Our rating action reflects the deterioration of credit metrics after unfavourable earnings development in the fiscal 2018 and the group’s weakened liquidity.”