The Nearmap (ASX: NEA) share price has bounced back an enormous amount. At the time of writing it’s up another 11% on Friday.
What is Nearmap?
Nearmap is a leader of aerial imagery technology and location data, providing frequently-updated, high-resolution aerial imagery. It currently operates in Australia, New Zealand and the United States, and is one of the ten largest aerial survey companies in the world by annual data collection volume.
What’s going on?
The COVID-19 outbreak has caused chaos on the share market as investors fear about what the effects economically will be. If lockdowns cause construction and various other activities to be scaled back then Nearmap could also expect to see a slowdown in demand.
Nearmap’s share price went as low as $0.86 two days ago, but it has since bounced back 24%.
The aerial imaging business gave an update this week management said that it continues its business services as usual and it’s on track to deliver new content types during this half of FY20. It reassured investors by reminding investors at December 2019 it had a closing cash balance of $49.6 million.
Nearmap also said it has a number of additional levers to maintain its capital flexibility.
No-one knows how long the outbreak will cause shutdowns for. US President Trump wants the economy back to normal sooner rather than later. Long-term investors may sense an opportunity of a heavily discounted Nearmap price. They may be right, but I think there are other shares to look at instead:
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Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.
