Voestalpine Shares Retreat as Investors Secure Profits

Voestalpine AT0000937503

As Vienna's leading stock index scales unprecedented heights, Voestalpine's equity is moving in the opposite direction. The steelmaker's stock is facing significant selling pressure, with market participants capitalizing on substantial gains accrued over the past year. In recent trading, the share price declined by 1.4% to €37.05, placing a key technical support level under threat.

• Current Share Price: €37.05 (down 1.4%)
• Year-to-Date Performance: +103%
• Market Context: ATX at record high while Voestalpine underperforms
• Corporate Action: Board plans to use treasury shares for convertible bond obligations
• Technical Level: €37 mark represents critical near-term support

A Pause Following a Meteoric Rise

The contrast with the broader market is striking. While the Austrian ATX benchmark celebrates new all-time highs, Voestalpine shares are failing to participate. This divergence signals a consolidation phase following an explosive rally that saw the stock's value double since the beginning of the year. Elevated trading volumes suggest investors are locking in profits rather than positioning for immediate further gains.

Thursday's closing price indicates a notable cooling-off period. Although the shares trade just 1.5% below their 52-week peak of €37.58, they have moved considerably away from the 200-day moving average, which stands at €27.04. A sustained drop below the €37 zone is viewed as a potential trigger for additional selling.

Treasury Shares to Fulfill Convertible Bond Terms

Amid the share price weakness, a recent corporate decision is drawing attention. Voestalpine's board has resolved to utilize treasury shares to service its 2023 convertible bonds, should bondholders choose to exercise their conversion rights. These bonds remain outstanding until 2028.

The company will draw upon shares acquired through its 2022/2023 buyback program. Voestalpine currently holds over 7 million of its own shares, equivalent to nearly 4% of its share capital. To fully satisfy the conversion rights at the current conversion price, up to 6.17 million shares would be required. This approach prevents dilution for existing shareholders, as it avoids the need to issue new equity.

Technical Picture Reaches a Pivotal Juncture

From a chart analysis perspective, the situation appears tense. The €37 level is serving as a short-term support floor. A breach of this level would shift focus to lower support zones. The Relative Strength Index (RSI) reading of 38.2 already indicates the stock is approaching oversold territory. However, as long as the ATX maintains its strength, this pullback could be interpreted as a healthy correction within a broader upward trend.

Heightened volatility, measured at 34% on a 30-day basis, underscores the current nervousness among traders. The defense of the €37 area is likely to be decisive in the short term; failure to stabilize here risks a test of more substantial support levels further down.