Deja vu! Why is the Appen share price crashing 17% today?

Deja vu! Why is the Appen share price crashing 17% today?
By Tech
May 18

Deja vu! Why is the Appen share price crashing 17% today?


Deja vu! Why is the Appen share price crashing 17% today?

Appen Limited is a leading provider of high-quality training data for machine learning and artificial intelligence. Founded in 1996, the company has grown rapidly in recent years as demand for machine learning has skyrocketed. However, today the company’s shares have taken a nosedive, dropping a whopping 17%. What could be behind this sudden drop? Let’s take a closer look.

COVID-19 Impacts on Business Operations

As with many businesses, Appen has felt the impact of the COVID-19 pandemic on its operations. In its latest update to shareholders, the company noted that it had experienced lower productivity and increased costs due to disruptions caused by the pandemic. In particular, travel restrictions have made it difficult for the company to perform certain data collection tasks that require on-the-ground work. Additionally, the company has had to implement new safety protocols to protect workers, which has slowed down productivity.

However, it’s worth noting that many investors may already be aware of these impacts, so they may not entirely account for the sudden drop in the company’s share price today.

Disappointing Financial Results

Another possibility is that the market was reacting to Appen’s latest financial results which were released yesterday. While the company reported an increase in revenue and underlying earnings, it also lowered its guidance for FY2021. The company cited increased competition and delays in securing new projects as contributing factors to the revised forecast. This news may have come as a disappointment to investors who were expecting more positive news from the company.

It’s also worth noting that there have been some concerns raised about the quality of Appen’s underlying earnings, with some analysts suggesting that the company’s earnings may be overstated due to accounting adjustments that are not reflective of the true economic reality of the business.

Market Volatility

Of course, it’s also possible that today’s drop in Appen’s share price is simply a result of broader market volatility. With so much uncertainty and instability in global markets right now, even good news can be drowned out by the noise of larger market movements.

There may also be technical factors at play, such as algorithmic trading and short-selling, that are exacerbating the effects of market volatility on individual stocks like Appen.

While it’s difficult to say exactly why Appen’s share price has dropped 17% today, it’s likely that a combination of the factors outlined above have contributed to the decline. COVID-19 impacts on business operations, disappointing financial results, and market volatility all likely played a role in the sudden drop. However, it’s important to note that Appen remains a leading provider of training data services for machine learning and AI, and the longer-term outlook for the company remains positive.

Investors should carefully consider their own risk tolerance and investment goals before making any decisions about buying or selling shares in Appen or any other stock. As always, it’s wise to seek the advice of a qualified financial advisor before making any investment decisions.

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