Elektra Shares Plummet as Trading Resumes on Mexican Stock Exchange
Grupo Elektra, the Mexican retail and financial services giant led by billionaire Ricardo Salinas Pliego, faced a dramatic downturn as its shares resumed trading on the Mexican Stock Exchange (BMV).
The company’s stock price plummeted by nearly 60% upon its return to the market, marking a tumultuous chapter in its financial history.
The troubles began in July 2021 when a personal company of Salinas Pliego secured a $110 million loan, using Grupo Elektra shares as collateral.
The lender subsequently sold these shares without notifying Salinas Pliego, sparking a legal dispute. This led to a prolonged trading suspension, which exceeded the 20-day limit set by exchange rules.
Despite Grupo Elektra’s efforts to maintain the trading ban through court injunctions, regulators lifted the suspension on November 22, 2024.
Grupo Elektra’s Challenges and Strategic Shift
The company warned that this action would cause “irreparable damage” and create market instability. True to these predictions, the stock’s value collapsed upon resuming trade.
The sharp decline in share price reflects broader challenges facing Grupo Elektra. The company has been embroiled in legal battles over tax debts and faced a credit rating downgrade.
Fitch Ratings cited concerns about corporate governance practices within the broader Grupo Salinas conglomerate. Amidst this turmoil, Grupo Elektra announced plans to delist from the BMV and go private.
The company stated that the market fails to reflect its true value, both in digital and physical operations. This decision came after Elektra’s removal from Mexico‘s primary stock index in August 2024.
Despite these challenges, Grupo Elektra’s financial performance showed some resilience. In the third quarter of 2024, the company reported a 13% increase in consolidated revenue and a 42% growth in EBITDA.
However, it also recorded a net loss of 574 million pesos, up from 183 million pesos in the same period last year.
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