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Shares of Platinum Asset Management (ASX: PTM), one of Australia's prominent investment firms, experienced a significant downturn on Wednesday, plummeted by 21.07% to AU$1.013. This decline marks the largest intraday percentage fall since March 14, 2003.
The company anticipates receiving partial redemptions totaling at least AU$1.4 billion ($912.4 million) from its institutional and wholesale business in the coming month. Additionally, Platinum Asset Management disclosed that one of its major clients intends to rebalance exposure, although the account is expected to remain but with a reduced mandate size.
As a consequence of these developments, the company foresees a decline in annualised fee revenue of approximately AU$18 million. This reduction is attributed to the combination of partial redemptions and other changes in institutional accounts expected over the coming months.
Platinum Asset Management's shares hit their lowest level since February 29, reflecting investor concerns surrounding the company's recent announcements. Trading activity surged, with approximately 10 million shares changing hands, significantly surpassing the 30-day average of 2.9 million shares.
Despite the broader market trends, Platinum Asset Management's stock has remained relatively weak year-to-date, registering a decline of approximately 2% as of the last close.
The sharp decline in Platinum Asset Management's share price underscores the challenges facing the company in navigating market dynamics and addressing client concerns. As investors digest the implications of the company's disclosures, heightened volatility in its stock may persist in the near term.