The Boohoo share price is down by more than 3 per cent in the early hours of today’s trading session, despite starting strongly and giving signals of extending the bullish trend of the past two trading sessions.
The drop comes amidst reports that some of Boohoo’s warehouses have been mistreating their workers. In one such report, it was found that their Burnley distribution facility forced their workers to walk an equivalent of half a marathon in sweltering temperatures. Workers at the facility were also reported to have collapsed in aisles due to poor working conditions.
The report on the Burnley facility also found that workers had also reported cases of racism and sexual harassment and indicated no steps were taken to address these issues. They also indicated that no accommodations were made when workers suffered injuries.
The reports were so damning, prompting government officials to respond to instances of these mistreatments. When speaking about the issues exposed by the Times Investigation, Mel Stride, the work and pensions secretary, called the mistreatments deeply disturbing in an interview with the Times Radio. He also added that he was deeply concerned about the reports, emphasizing that nobody should work under the conditions that were highlighted.
The Boohoo share price is like to continue plunging throughout the session following the revelations that they had mistreated some of their workers. As seen today, when the markets opened strongly but started responding to the fundamental sentiments of the company, it is highly likely that the bearish trend will continue for the next few trading sessions.
Looking at the chart below, it is highly likely that we might see a further drop in Boohoo’s share price in the next few trading sessions. Therefore, I expect to see the share price dropping below 35p in the next few trading sessions and possibly hitting the 30p demand level. However, a trade above 45p will invalidate my bearish analysis.
This post was last modified on Nov 25, 2022, 11:09 GMT 11:09