One of the biggest Hong Kong clothiers, Esprit Holdings (PINK:ESHDF) faced a major dip in its stock price after former Chairman Michael Ying sold 55 million shares for HK$4.67 billion or US$600 million. The stock price was a steep drop in an intraday trading. It fell about 7.1 percent to HK$53.60.

On 3 February, Esprit reported its first half profit resulting in a spike in the stock price. However, a company controlled by Ying, Great View International sold 86 million shares, representing 6.7 percent stake in Esprit at HK$54.25 each. Ying took an advantage of investor’s reaction to the result of the company. The stock prices had increased by about 7.9 percent a day earlier after the announcement. As per Forbes Asia Magazine, Ying is one of the 13 richest men with a net worth of about US$2.5 billion. Ying did see his personal benefit in selling the shares, ignoring the company’s well being once to which he had been a guiding factor. Being a major stakeholder in the company, his act has been quite a blow to company’s share market performance. The constant sale of company’s stock reduced Ying’s stake from 30 percent from the year 2004. Esprit’s share has increased to 126 percent since 2004.

According to analysts, Ying has consistently sold shares in the past few years. Keeping this apart, Esprit is winning confidence of investors by delivering good performance and has announced to restructure in key markets. The company has plans to redesign stores to give them a new look matching with the brand image.

One of the analysts remarked that the sale may create a short term dip in stock’s market price but it will definitely bounce back. They recommend the share as a good investment if the investors are ready to hold the stock for sometime. Before the dip, the share had increased by 11.5 percent in this year, which was quite an achievement. The company’s stock was considered to be one of the best performing stocks on the Hang Seng Index.

The stock closed at HK$57.70 after the dip in the share price by 3 to 6 percent to the closing price of a day prior.