Troubled lender Bradford & Bingley has joined housebuilder Taylor Wimpey in the 90% club - companies whose shares are now worth just 10% of their peak value over the last three years, research shows.
The firm, which today announced that only a quarter of shareholders took up its new rights issue, is currently 55p per share, down 90% from its peak of 536p, according to a study by financial information company DigitalLook.com.
As at 14 August, Barratt Developments stood at 124.75p per share, down 90% from its peak of £12.89, while Taylor Wimpey was at 48p, down 91% from its peak of 518.5p.
Andy Yates, director of DigitalLook.com, says: “Some people might see the 90% club as a portent of impending doom but you could equally see it as a positive sign – that the stock market has gone through its necessary shake out and that all the doom and gloom has now been priced into shares.
"It might sound a bit glib but it is seen by some as necessary precursor of a recovery.
“Over the last three weeks there has been growing optimism that the stock market had reached its floor. I think this is a none-too-gentle reminder that investors will have to keep their wits about them – there are going to be more than a few bumps in the road ahead.”
Yates also points out that those who were brave enough to buy Barratt Developments shares at their low of 39p would now be sitting on an increase of 220%.
“I think you can draw some positives from this,” Yates adds. “The market is suggesting that the slump into the residential property market is not going to have as savage an impact on broader consumer spending patterns as it has previously forecast."
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