Shares of Grupo Elektra (BMV:ELEKTRA), the Mexican retail and banking company, experienced a dramatic drop of over 60% on Monday. This plunge occurred after the Bolsa Mexicana de Valores, Mexico's stock exchange, was instructed by regulators to allow trading to continue, despite the activation of circuit breakers during the premarket auction.
The circuit breakers, designed to prevent excessive volatility, had previously kept the stock from trading for several days.
The sharp decline in Elektra's stock price, which fell to approximately 355 pesos from its last traded price of 944.95 pesos in July, erased about $4 billion from the wealth of Ricardo Salinas Pliego, the company's billionaire owner.
Salinas, who holds a nearly 75% stake in Grupo Elektra, saw the value of his shares decrease to an estimated $2.9 billion, down significantly from $7.6 billion on Friday. Consequently, his total net worth has now been assessed at $6.2 billion by the Bloomberg Billionaires Index.
This financial setback has caused Salinas to drop from the third to the fourth richest person in Mexico, now trailing behind Alejandro Bailleres. Previously, Salinas had been positioned just after Carlos Slim and German Larrea in terms of wealth.
The trading halt had already led to Grupo Elektra's removal from Mexico’s benchmark stock index, leaving the company exposed to potential losses as funds that track the index adjusted their portfolios.
Grupo Elektra, in a statement on Monday morning, claimed to have a court order that would prevent trading from recommencing and warned that anyone trading its stock could face legal consequences. The company has yet to provide additional comments following a request for further information.
In the backdrop of these events, last week Grupo Elektra announced plans to convene a meeting in late December to discuss the possibility of taking the company private.
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