What happened
Shares of jewelry retailer Tiffany & Co. (TIF) slumped on Thursday after news broke that Qatar's sovereign wealth fund sold a large block of shares. The shares were reportedly priced near $94.40 per share, a bit below the closing price on Wednesday. The stock closed on Thursday down about 4.8%.
So what
According to a statement provided to Bloomberg by Morgan Stanley, the bank that executed the trade, the Qatar Investment Authority, sold 4.4 million shares of Tiffany & Co. for approximately $417 million. A 9.5% stake in Tiffany & Co. is still held through subsidiary Qatar Holdings USA LLC, but the sale represents a significant downsizing.
Image source: Tiffany & Co.
This sale comes after shares of Tiffany & Co. have rebounded strongly since mid-2016. The stock is up about 50% since the beginning of July 2016, even after Thursday's decline, although it's still down about 15% since the beginning of 2015.
Tiffany & Co. hasn't been immune from the difficult retail environment. During the second quarter, comparable sales slumped 2% year over year, while total sales rose 3% due to a rise in wholesale sales. Earnings per share rose 9%, driven by the increase in sales.
Now what
Given the ongoing diplomatic crisis in Qatar, the sovereign wealth fund selling off shares of Tiffany & Co. probably isn't a reflection on the company itself. Reports of potential asset sales were reported back in June. If you thought Tiffany & Co. was a good investment yesterday, there's no real reason to change your mind.
