Tourism is still dead and TUI stock shows that there is another uncertain year ahead of us.
After a closing price of EUR5.44 on Thursday, TUI shares started at 4.33 euros with a price discount of around 20 percent on Friday.
The explanation for the price disaster lies in the capital increase: At the extraordinary general meeting on January 5, it was decided that TUI will issue almost 509 million new shares. The subscription price for the new shares was set at EUR 1.07.
The subscription rights will be traded under the company’s own WKN TUAG10 up to and including January 22nd. The old TUI share has the WKN TUAG00.
TUI is likely to receive around EUR 500 million through the capital increase. The largest TUI shareholder Unifirm had already promised to subscribe at least to the extent of its stake of almost 25 percent.
Is TUI stock a good buy right now?
The German state should now own – as also decided last Tuesday – with up to 25 percent plus one share in TUI. At this level, the federal government would also have a blocking minority and thus a say in further central decisions. So, investing in TUI right now would mean that you are investing in a state owned company, sort of.
The “rescue operation” is intended to help the tourism giant to financially bridge the time it takes to cope with the corona pandemic. However, some analysts do not believe in a great future in the foreseeable future. NordLB has raised the price target for TUI shares after the green light for the third aid package, but only to 3.00 euros.
TUI will be a good stock to buy if the price goes below EUR3.00, until then we should wait and see what will happen.