Games Workshop, maker of Warhammer battle figures, has seen its stock drop sharply amid indications that it may be facing a customer revolt.
The FTSE 250 business, a stock market darling, saw profits boom during pandemic as its loyal fans splashed the cash on miniatures of goblins.
The stock price has increased by more than 160 per cent since the launch of Covid-19 last march. According to Jefferies analysts, the company is now facing the ire from its legions of supporters as it plans to tighten its grip on its intellectual property (IP).
Sabre-rattling: Games Workshop is facing the ire of its legions of fans amid plans to clamp down harder on the use of its intellectual property
“It seems that there is a fair amount of discontent in Warhammer fan bases at present, having spent time browsing through forums and fan sites,” the broker wrote.
The catalyst seems to have been a stronger approach to IP protection, especially in relation to fan sites and animation. This change has led to popular fan content creators ceasing their involvement (under pressure from Games Workshop), a lot of negative community feedback, a raft of downvotes to Warhammer video content, and, with other factors also rolled in (price increases, employee pay), calls to boycott the business.’
Warhammer+, Games Workshop’s subscription-based service that allows access to exclusive Warhammer TV shows and figurines, was the catalyst for the crackdown.
Jefferies stated that while the current noise was from a vocal minority’ they have lowered their target price to 12,250p from 13,200p and would be ‘keeping an eye’ on the situation.
Investors also seemed unnerved by the sabre-rattling as the shares dropped 7.7 per cent, or 805p, to 9645p. The FTSE 100 lost 0.16 percent, or 11.9 points to 7237.57, while FTSE 250 fell 0.4%, or 93.26 point to 23106.61.
Markets were hit hard by disappointing results from US and UK corporations. Wizz Air, a budget airline lost some altitude. Its chief supply officer, Andras Segbok, was fired for secretly trading shares in the group over a period of more than a decade. He had traded shares 114 times between April 2019 & November 2018 without notifying the company. Wizz announced that Sebok had been terminated ‘with immediate effect’.
Hilton Food Group, a supplier of fresh food to Tesco (up 0.1 per cent, or 0.3p, to 269.9p), snapped up meat supplier Fairfax Meadow for £23.8m in cash. Four meat processing and packing plants in Derby, Milton Keynes and north London were taken over by Hilton. The company also provided an update, stating that its performance to date from July 19 was in line with expectations. The shares edged up 0.9 per cent, or 10p, to 1168p. Computacenter, an IT firm, suffered a drop of 2.3% or 64p to 2690p. This was due to the fact that it claimed supply shortages were affecting the timing and inventory levels of some of its orders as it waited on components.
Despite this, shortages were “not as severe than some market predictions”, with trading for the three month period ending in September being’marginally better’ than company expectations.
Convatec, a manufacturer of bandages, saw its stock jump 8 percent to 213.8p (or 15.9p) in the wake a positive trading update. Revenues for 2021 were expected to grow ‘towards the upper end’ of the group’s expectations of 3.5 per cent to 5 per cent after momentum in its wound care business helped push sales up 3.7 per cent year-on-year to £370m in the three months to September 30.
UBS analysts upgraded Miner Hochschild to ‘buy’ from “neutral” but reduced their target price from 220p to 200p. They said the company was a ‘attractive’ company due to its undemanding valuation’. However, shares plunged by 3.8 per cent or 5.7p to 12.4p.