No growth but unwinding inventories pumps Kogan shares 30% higher

Kogan (ASX:KGN) shares have snapped a longstanding tradition of freefalling after a business update, opening 7% higher as the market opened.

A frenzy of buying activity has pushed the stock 37% higher at 11:30 am AEST, with current volumes sitting at 2.7m compared to its 20-day average of about 800,000.

At face value, Kogan announced a rather muted fourth quarter and full-year FY22 update.

Table: Market Index | Source: Kogan

Perhaps what was most encouraging, was the "significant unwinding" of inventories from $227.9m at the end of FY21 to now, $161.1m.

Even after a near 40% rerate, Kogan shares are still down -52% year-to-date and -83% away from October 2020 all-time highs.

The curse is broken

Since the beginning of 2021, Kogan had a ritual of purging its valuation every few months with poor business and/or financial updates.

2021

• 29 Jan: Business update (-8.5%)

• 26 Feb: 1H21 results (-10.4%)

• 23 Apr: Business Update (-14.3%)

• 21 May: Business Update (-14.6%)

• 21 July: Business Update (-1.5%)

• 24 Aug: FY21 results (-15.5%)

• 20 Oct: Business Update (+6.7%)

• 25 Nov: Annual General Meeting (-4.3%)

2022

• 27 Jan: Business update (-12.3%)

• 25 Feb: 1H21 results (-6.2%)

• 29 Apr: Business update (-13.9%)

• 28 Jul: Business update (+39.6%)

Excluding today's move, the average decline was -8.6%. Now it's improved to -4.6%.

Kogan 12-month share price chart