The Tragic Collapse of the BT Share Price From 380p to 114p

Summary:
• BT share price crumbled to the lowest level since February 2021 after the company published mixed half-year results. What next?

BT share price crumbled to the lowest level since February 2021 after the company published mixed half-year results. The shares crashed by more than 42% from the highest level since 2021. Its market cap has dropped to about £11.9 billion 

It’s risky to buy the BT dip

BT Group published its half-year results on Thursday that showed a company going in turbulent times. Its total revenue jumped by just 1% to £10.4 billion, helped by growth of its Consumer and Openreach. This growth was partially offset by a major dip of its Enterprise revenue. 

Its adjusted EBITDA rose by 3% to £3.9 billion, helped by higher revenue growth. Its reported profitability dropped by 18% due to increased depreciation from network build while its capital expenditure rose by 2% to £2.6 billion. 

In a statement, BT said that it will start raising prices in line with inflation in the coming year. The goal is to help offset the rising costs as inflation surges in the UK. Data published last week showed that the headline consumer price index (CPI) in the UK rose to more than 10% in September. And analysts expect that prices will keep rising.

So, is it safe to buy BT stock? BT Group has been dead money for years. Its stock soared to a high of 380p in 2016 and has now crashed to about 116p. This means that the stock has erased more than 70% of its value in just a few years. Its attempts to recover have failed as the stock failed to attract more buyers.

Now, results show that the company’s business growth has stalled and its profitability is fading. As such, it is relatively difficult to recommend investing in BT Group.

BT share price forecast

In determining whether BT is a good stock to buy, let us look at the weekly chart. The chart shows that the shares formed a triple-top pattern at around 193p. In price action analysis, this pattern is usually a bearish sign. It remains slightly below the neckline of this pattern at 128p. The shares have also dropped below the 25-day and 50-day weekly moving averages.

Therefore, I suspect that the BT share price will continue falling as sellers target the key support at 90.70p, which was the lowest level on 14th September. A move above the resistance at 130p will invalidate the bearish view.