Why Did The Esken Share Price Struggle in 2023?

Esken Ltd, a publicly-listed aviation and energy infrastructure firm, experienced a dramatic stock price reversal in 2023. After kicking off the year on solid footing, Esken’s shares went on a 10-month slide that culminated in a crash below £2 - a gutting decline of nearly 85% from peak to trough. How did things go so wrong?

This in-depth article will analyze the rallies and sell-offs in Esken’s stock chart to understand the underlying forces fueling the fluctuations at different points during the year.

The Business Landscape of Esken Ltd

Esken company was created in August 2007 when the Westbury Property Fund entered into a reverse acquisition, which enabled Eddie Stobart Logistics to gain a stock market listing.

The company owns London Southend Airport and a collection of aviation infrastructure assets under its Stobart Aviation division. Esken also invests in renewable energy projects focused on biomass and waste-to-energy technologies.

As a publicly-listed corporation on the London Stock Exchange, Esken’s share price reflects the market’s evolving assessments of the company’s financial health, growth potential, management decisions, and overall ability to generate shareholder value.

Monitoring the stock’s highs, lows, trading volumes, and closing prices provides perspective on investor sentiment and Esken’s fundamental performance.

Esken’s Share Price in January 2023

The year began on a relatively positive note for Esken’s stock. In January, the Esken share price reached a high of £6.49 before pulling back modestly to close the month at £5.60. The peak represents a premium of nearly 16% compared to the 2022 year-end close.

Several elements may have supported investor optimism in January 2023:

• Strong holiday passenger numbers at London Southend Airport for the winter season
• Progress on renewable energy investments and contract wins
• Expectations for travel demand recovery post-pandemic

The January close above £5.50 indicates shareholders felt confident in Esken’s direction at the start of 2023 despite broader economic uncertainties. January would mark the highest point for Esken’s stock price all year.

Hitting a Peak in February 2023

In February 2023, positive sentiment pushed the Esken share price to an annual high of £7.00, a gain of over 25% from January’s high. The Esken share price closed the month at £6.10, marking the peak valuation achieved.

Driving factors behind the February rally likely included:

• 2022 full-year earnings results beat expectations
• Management issued upbeat guidance for 2023
• Acquisition rumours circulated, signalling external interest

Esken appeared well-positioned in February as the top-performing small-cap stock month-to-date. But the Esken share price would face headwinds in the coming months.

Share Price Stabilizes in March and April 2023

Following the February peak, the Esken share price shed some gains in March and April but maintained stability in the £5 to £6 range. March saw a high of £6.49 and a close at £5.31, while April reached £5.48 before closing essentially flat at £5.30.

During this period, the price action suggests investors remained cautiously optimistic despite some concerns creeping in:

• Broader UK stock market declines affected sentiment
• The high inflation/rising rate environment instilled uncertainty
• The full impact of the jump in fuel costs is not yet clear

The mild sell-off shows Esken was not immune to external factors weighing on equities, though the aviation firm maintained strong support near £5.

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Substantial Declines Through Summer 2023

May 2023 marked the beginning of a substantial slide in the Esken share price that accelerated into the summer months. In May, the stock rallied to £5.83 but sold off to close at £5.00, down 17% from April.

The downturn gained momentum in June, with the price reaching a high of just £5.48 before plummeting to close at £2.74, a 45% monthly drop.

Another leg lower came in July, with the stock peaking at £3.50 and closing at £3.34 after a brief rebound off the June lows.

Attempted Recovery Fizzles Out in Q3 2023

Esken’s stock tried to stage recovery rallies in August and September but ultimately gave back any gains. In August, the Esken share price reached a high of £4.00 but faced selling pressure to close at £3.40.

A similar pattern played out in September, hitting a peak of £4.00 before retreating to end the month at £2.78.

Traders initially saw the sell-off as overdone and value at lows:

• The long-term growth story is still intact post-pandemic
• Cost cuts could protect profits amid challenges
• Low valuation attractive for potential acquisition

However, the aborted rebounds signalled persistent worries about:

• Ongoing impact of elevated fuel and inflation costs
• Reduced consumer discretionary spending
• Competitive environment across the aviation industry

Without a meaningful improvement in the operating backdrop, investors remained cautious.

Hard Landing in Q4 2023

The Esken share price fell in Q4 2023, plumbing new lows in November and December. The stock briefly reached £3.70 in November before crashing to close at £1.60 for the month, its weakest settle since spring 2020.

Selling accelerated in December, with the price unable to get traction above £2.00 and ending the year at £1.21.

Stuck at Lows in Early 2024

In early January 2024, there are few signs of positive momentum returning for Esken’s battered share price. The stock remains depressed, trading around £1.50 and unable to break out.

Investors have taken a highly bearish view:

• Balance sheet distress increased bankruptcy risks
• Asset sales capital raises are possibly on the horizon
• Competitive challenges intensifying
• Broader UK equities still struggling

After the punishing declines of 2023, Esken has a mountain to climb to rebuild shareholder confidence and stabilize its business. The stock may remain stuck at multi-year lows until underlying performance improves.

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Closing Thoughts

It seems unlikely that Esken will make a major price surge in 2024. The company’s stock experienced a dramatic decline of nearly 85% from peak to trough in 2023, driven by macroeconomic headwinds, industry challenges, disappointing financial results, and company-specific issues.

Despite attempted rallies in Q3 2023, the stock failed to recover and ended the year at multi-year lows around £1.50. Esken continues to face competitive pressures, balance sheet concerns, and a lack of investor confidence in early 2024.

Yet, the stock could rise if Esken transforms operations, improves financial performance, and regains investor trust. However, without significant positive changes within the company, the prevailing conditions point to Esken’s stock remaining depressed through 2024.

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“When considering “CFDs” for trading and price predictions, remember that trading CFDs involves a significant risk and could result in capital loss. Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be considered investment advice.”