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Rolls Royce Share Price Fall From 1100p to 70p – After Rights Issue

This article was updated to explain the reason why the shares fell to 70p.

Rolls Royce share price has collapsed by more than 65% as the company’s problems mount. The shares have declined to a low of 70p, which is the lowest it has been since April 2003 after it issued an additional 6,436,601 new shares. It is the worst performer in the FTSE 100 and in Europe.

Rolls Royce shares have dropped a day after the company’s investors backed its $2.6 billion equity raise. The shareholders voted by 99.5% for the fundraising as the company tries to shore its balance sheet. The fundraising is part of the 5 billion refinancing program because of the impacts of the pandemic.

The company’s stock has also dropped because of the rising number of Covid-19 cases around the world. Most European countries like Germany, France, Spain, and Norway have recently seen an uptick of infections. The same is true with countries like the United States, Canada, and Brazil.

As a result, countries are considering putting lockdown, which will affect travel. Also, some countries, like Norway have unveiled plans to put arrivals in quarantine. The implication is that international travel will take longer than expected to recover.

Worse, hopes of a vaccine by the end of the year have faded. In a statement yesterday, Pfizer’s CEO said that the company will not seek authorisation for its vaccine before election. As a result, many experts believe that a vaccine will not come out before the end of the year,

Rolls Royce share price is also falling as the company said that it is considering closing factories and reduce employees hours and pay as part of cost cutting. It is cutting management costs by about a third as part of its previously announced 9,000 cuts. At the same time, workers at Barnoldswick have announced that they will strike after the firm said it would move some of its work to Singapore.

The sharp decline of Rolls Royce shares today is a sharp reversal after the shares rose by more than 100% in September.

Rolls Royce share price technical outlook

On the weekly chart, we see an ugly Rolls Royce share price. It has been in a sharp decline from a high of 1110p in October 2018 to a low of 71p. The price has moved below all moving averages while the RSI has moved to the oversold level of 30. Therefore, at the current level, the price will continue being under pressure as the company continues to fight for its life.

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Rolls Royce share price

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