Thomas Cook’s shares shot up in early trading today, but not enough to offset a huge stock market slump over the last week.
The struggling travel agent’s share price rose 16 per cent this morning to 11.9p after falling to under 10p yesterday.
However, the share price rise was equivalent only to around 1.6p as the value of its stock hovered at such a low level volatility has set in.
A nosedive of 17 per cent yesterday, following a 40 per cent plunge last Friday, forced the firm – which is trying to sell off its airline arm – to take to Twitter to reassure customers that its immediate future is not at risk, saying “operations are running just as normal”.
However, panic gripped investors after the holiday maker issued yet another profit warning last week as well as a massive £1.45bn loss in the six months to the end of March.
The terrible set of results prompted Citigroup to warn shareholders that Thomas Cook’s shares were virtually worthless, valuing them at 0p and urging investors to sell out.
But over the weekend Thomas Cook issued a statement saying it has “the support of our lending banks and major shareholders”.
It has secured £300m in fresh lending to carry it through the winter, but the cash depends on Thomas Cook successfully selling its airline division.
Analysts warned Thomas Cook’s stock is now stuck in the doldrums, with CMC Markets’ chief analyst, Michael Hewson, warning: “It’s now a penny share so price moves at these levels will be exaggerated.”
Last week analysts warned that rising fuel costs, Brexit uncertainty and stiff competition has left Thomas Cook with “little room to manoeuvre”.
The firm said profit for its full-year would fall below last year’s level as net debt rose to £1.25bn.
Shares have shed 91 per cent of their value over the last 12 months, from a high of 139.1p this time last year.