Harvey Norman shares tank as insiders sell shares

Harvey Norman shares tank as insiders sell shares

Credit Suisse believes that, depending on Amazon's impact, Harvey Norman's earnings could fall between 3 and 9 per cent, while a Citigroup report a year ago estimated the retailer's profits could fall 19 per cent.

Late on Monday executive chairman Gerry Harvey took advantage of the share price fall and snapped up 2 million shares for $8.7 million, lifting his controlling stake.

In response to the Australian stock exchange notice issued yesterday, Harvey Norman said it was "not aware of any information concerning it that has not been announced to the market which, if known by some in the market, could explain recent trading in its securities".

Mr Ackery's share sale followed the on-market sale on March 14 of 210,000 ordinary shares worth $1.06 million by Ms Page, Harvey Norman's long-serving managing director and the wife of Mr Harvey. This comes after chief executive Kay Page last week also reduced her shares in the company.

After reaching eight-year highs of $5.38 last August, Harvey Norman shares have fallen 16 per cent since the retailer reported better than expected half-year profits in February.

The analysis, conducted by Swiss investment bank Credit Suisse, found Amazon setting up shop in Australia could directly result in Myer losing anywhere up to 55 per cent of its earnings over the next five years, according to The Australian.

Harvey Norman hasn't acknowledged the implications of the report, saying it doesn't know why its shares dropped by 8 per cent.

The ASX announcement also included questions about an Australian Financial Review (AFR) article published this weekend which raised questions about transparency of the company's accounts and its franchisee business.

In response to the ASX notice, Harvey Norman said: "The AFR article makes false statements and assumptions and then proceeds to make assertions and draw conclusions which are also false, based upon those false statements and assumptions".