Boohoo share price meltdown has continued recently as demand for the stock fades. The BOO shares have dropped in the past four straight weeks and is now trading at the lowest level since May 2016. The stock has dropped by almost 90% from its highest level on record. As a result, its market cap has collapsed to about 650 million pounds.
The sad decline of BOO
Boohoo share price has collapsed and made the company a fallen angel. At its peak in 2020, the company was valued at billions of dollars. The challenges emerged when the company was accused of poor labour relations in Leicester. While the management has made strides to improve the situation, the company has never recovered.
Boohoo stock price has also declined because of the recent profit warnings. The firm has reduced its profit outlook several times this year as demand plateaus. It is also facing strong competition from the likes of Shein and Zalando.
The company made headlines last week when it decided to add its stake in Revolution Beauty Group. It added the stake from under 3% to 7.1%. In a statement, the firm said that the investment reflected a belief in the company’s growth potential and that it hope to be a supportive shareholder.
Like Boohoo, Revolution’s share price has tanked in the past few months. It has erased about 90% of its value from its highest point this year, bringing its total market cap to about 52 million pounds. In addition, boohoo stock declined since investors believed that the acquisition will disrupt the management.
Boohoo share price forecast
The weekly chart shows that the BOO share price has been in a strong downward trend in the past few months. During this period, all attempts to recover have all failed as the stock found substantial resistance. This week, it managed to move below the important support level at 51.97p, which was the lowest level in June. However, a closer look shows that the shares’ volume has also declined.
Therefore, the stock will likely continue falling as sellers target the next key support at 40p. A move above the resistance at 51p will invalidate the bearish view.