The Polish manufacturer of disposable gloves was one of the winners in the pandemic. However, that streak appears to be over. Mercator Medical shares are losing their value for the seventh session in a row, and the declines have intensified.
At the beginning of 2020, when no one in Poland was serious about the reports from China on COVID-19 yet, the shares of the relatively small Krakow-based company Mercator Medical could be bought on the stock exchange for about PLN 10 apiece. Thus, the business of the glove manufacturer and distributor of single-use medical materials was valued at approximately PLN 100 million.
When the pandemic became a fact and the gigantic demand for Mercator products appeared, the company’s profits soared, and with them the share price. At their peak (in October 2020), they were even PLN 770 apiece, which meant an increase in their value by 7,600%. The company’s value reached PLN 8 billion.
The share price has been steadily falling since then, and now the declines have intensified. Wednesday’s session on the WSE is the seventh in a row when Mercator shares are below the line. Moreover, on the second day we observe a serious collapse.
Market observers are explaining the disappointment of investors due to the preliminary results of the company. The management board announced a significant drop in profits quarter on quarter. This is explained, among others, by price pressure exerted by the buyers of the gloves.
Mercator Medical, in response to weaker results and declines in share prices, wants to convince investors that it will not stand still and the management board has announced that it will enter a new business segment.
“We want to establish a new, but synergistic activity and we will announce it very soon, maybe within 2-3 weeks. We will announce what new we are going to do, how to invest. It will be synergistic with us on at least two levels” – said President Wiesław Żyznowski during Wednesday’s videoconference.
He admitted that he has very specific criteria for possible acquisitions of other companies, both in Europe and beyond. He revealed that he was in the process of intense research and preliminary talks.
The management board informed earlier that it was in the process of creating a new development strategy, taking into account a broad investment program, and that the possibility of acquisitions, especially of entities from complementary industries, and the development of the range of goods offered.