- Appen Limited was the second-best performer on the ASX today (16 June)
- Shares of the artificial intelligence services provider rose 5.10% today
- Appen will be removed from ASX 200 index as part of June quarterly review.
Former tech darling Appen Limited (ASX:APX), which has been going through a rough phase of late, led a fleeting rebound in the beaten-down tech sector today. Shares of the artificial intelligence services provider rose 5.10% on Thursday (16 June) to become the second-best performer on the ASX 200 benchmark index. Appen shares closed at AU$5.360 apiece today after rising to an intraday high of AU$5.80.
With today’s gains, Appen managed to reverse part of the losses it suffered in the past five trading sessions. In the last five trading sessions, Appen shares are down by 8.84% even after taking into account today’s gains. In the last one month, Appen shares are down 20.59% and nearly 61% in the last one year.
Appen’s performance was broadly in-line with the performance of the overall tech sector on ASX. The ASX All Technology (XTX) index has lost nearly 37% in the last one year and 12% in the last one month. Rising interest rates weighed on the richly valued tech sector as investors hesitate to pay higher price when interest rates go up.
Suggested reading: Identitii (ASX:ID8) shares gain over 22% on Rabobank deal
What’s happening in Appen lately?
Other than the overall weakness in the tech sectors, some of the recent developments also weighed on Appen share prices.
The stock will cease to be a part of the benchmark ASX 200 index with effect from 20 June. It will be removed from the ASX 200 index as a result of the June quarterly review.
Other companies that will also be removed from ASX 200 are Codan Limited (ASX:CDA), Polynovo Limited (ASX:PNV), Tyro Payments Limited (ASX:TYR) and Platinum Asset Management Limited (ASX:PTM).
When a stock is removed from a benchmark index, passive funds tracking that particular index, tend to sell the stock as part of their portfolio rejig.
Another big event that attracted investors’ attention to Appen was the non-binding and conditional proposal it received from TELUS International to buy 100% shares of the company on 26 May 2022. Appen shares rose 29% on the same day. After giving this proposal, TELUS revoked it without providing any reason on the same afternoon. As a result, Appen shares lost almost all the gains of the previous day.
Related article: Why are Appen (ASX:APX) shares in limelight?
Image source: © Ipopba | Megapixl.com
Appen claims that it is a leading Artificial Intelligence (AI) annotation provider and compared to its competitors, it generates higher revenues.
Appen strategy is based on four pillars:
- To diversify revenue
- Automate crowd and labelling process
- Expanding product offering
- Evolving the way of doing business