Shares of Israeli liner operator Zim plunged 14% in New York on Friday morning trading as investors reacted to the news of a settlement in the US port strike.
The sell-off followed a similar reaction in Europe, where AP Moller-Maersk plunged as much as 8.6% in Copenhagen, while Hapag-Lloyd lost 12.8% in Frankfurt.
A volatile stock
Zim is one of the more volatile shipping shares trading on the New York Stock Exchange, and it previously has seen large moves based on other geopolitical events, such as the Houthi attacks on shipping in the Red Sea.
Friday’s move shows that there was still some strike-related upside baked into the stock. But it deflated quickly as 8m shares had traded hands by mid-morning against an average daily turnover of 5.5m.
Zim hit an intraday low of $18.64 from a previous close of $21.67, then began to slowly lift off the bottom.
The share price is still closer to Zim’s 52-week high of $26.220 — reached earlier in the week as the strike began — than the low of $6.39.
As TradeWinds reported late on Thursday, the union that closed port terminals across a swathe of the US coastline and threatened to cripple supply chains reached a tentative deal with employers that will send dockworkers back to their posts.
The International Longshoremen’s Association and the employers’ group covering vehicle and container ports on the US Atlantic Seaboard and Gulf Coast said the tentative agreement on wages comes with an extension of their existing contract until 15 January.
Zim and other liner stocks had seen a run-up in pricing in recent weeks, largely on the anticipation that a strike might be prolonged and dramatically lift rates. Instead, it lasted less than three days.
Investment bank Jefferies and lead shipping analyst Omar Nokta had cut Zim from “buy” to “hold” on Wednesday. Zim already had traded up 40% in the previous month, he noted, so disruption risk already was baked into the share price.
Jefferies maintained its $25 price target on shares of the Idan Ofer-backed company.
