The dramatic value development of TUI stock – from around 30 euros before the pandemic to currently about 6.90 euros – is a striking example of the risks and challenges that private investors and savers may face in the stock market. This development reflects not only the impacts of the Corona pandemic but also the structural weaknesses and market risks of the company and the entire travel industry.
Causes of the Price Decline
- Pandemic-related downturns: The COVID-19 pandemic led to massive restrictions in international travel. TUI, as one of the world’s largest travel companies, was particularly hard hit.
- Financial burdens: During the crisis, TUI had to raise capital multiple times, leading to a significant dilution of existing shareholdings. This further depressed the stock price.
- Weak quarterly results: Even after the end of acute lockdowns, the recovery fell short of expectations. Recently, weak numbers were reported, which further strained confidence.
- Technical chart signals: The stock continues to trade below its 200-day line – a classic sign of a persistent downtrend.
Market Development and Current Situation
Despite occasional glimmers of hope – such as positive news from other parts of the industry like Ryanair or short-term price increases – TUI stock has not yet been able to recover sustainably. Analysts see a potential upside of up to +27% from the current level, yet the stock remains technically weak.
The support at around 6.75 euros (50-day line) is crucial: If this is breached, further downside potential looms. For many private investors, this means a significant reduction in the value of their investments made during or shortly after the pandemic.
Importance for Private Investors
For private investors, the development serves as a lesson in risk management:
- Diversification: Concentrating on individual stocks or sectors can lead to massive losses during crises.
- Long-term vs. Timing: Those who buy during a crash (“Bottom-Fishing”) must expect lengthy recovery periods.
- Recognizing industry risk: Especially cyclical sectors like tourism are vulnerable to external shocks.
Conclusion
TUI shares exemplify so-called “portfolio corpses”: stocks with massive value loss without any foreseeable trend reversal. This underscores the necessity for savers and investors to have a broadly diversified portfolio and to critically assess the opportunities and risks of individual investments.