Spark shares fell to a 15-year low on Wednesday - will they slump further?
Thursday, 25 June 2026
ANALYSIS: Some 4.5 million Spark shares changed hands on the NZX on Wednesday - the heaviest traded stock of the day - but it was also a record for another reason: Spark shares saw their value fall 2.5%, to a 15-year low of $1.775.
The negative trajectory was in part the result of a global sell-off in tech and telecoms stocks, but it was also the continuation of a two year plummet in Spark’s share value. Spark shares have lost 57.3% in value over 24 months, from $4.16 per share in late June 2024 to yesterday’s low.
Globally, markets tumbled on Tuesday, led by an artificial intelligence and chip stocks slump. The trend began in South Korea, where its two largest semiconductor makers - Samsung Electronics and SK Hynix - dropped 12% in value each. Contagion soon spread to the US, where the Philadelphia Semiconductor Index (SOX) fell 7.9% in a single session, and all its 30 member stocks retreated.
More broadly, Nvidia, one of the world’s most valuable companies, lost 4.1%, heavily weighing down the broader S&P 500, while Micron Technology plummeted 13.2%.
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Elon Musk’s SpaceX’ fortunes did not help matters. Despite the stock sitting comfortably above its US$135 debut price, the exuberance of its debut is gone.
Analysts quoted by Reuters and NBC News said geopolitical macro shocks sat behind the sharp pull-back in tech. The closure of the Strait of Hormuz has caused an 'inflation premium' to develop on money-hungry AI/tech companies - the expectation of more expensive borrowing costs as central banks around the world adopt a more hawkish tone.
But Spark has had its own specific issues to deal with as well. According to local analysts, structural shifts in its business model, aggressive margin compression, a prolonged domestic economic downturn, and a change to its dividend policy have all played a part.
Once a “defensive” stock - a company producing consistent dividends from stable earnings - Spark’s old dividend policy was to pay out a flat 25 - 27.5cps regardless of its earnings or how much physical cash the business generated. Sometimes, the company had to borrow money to pay the promised dividend.
Because of its various operational pressures in the last few years, Spark has had to change that policy to one that is tied to how much the company actually generates in cash, effectively restricting it to 15 - 17cps.
The company is no longer the reliable dividend machine it once was, and investors are discounting the stock, despite the company’s considerable success in aggressively reining in its costs.
Path to problems
In 2022, Spark sold 70% of its mobile tower business to the Ontario Teachers’ Pension Plan for for $900 million. The company was left was an underperforming core IT services division that was battling to retain its large corporate and government clients in an economic downturn, and up against more nimble competitors for that business.
In 2025 the company suffered a 78% plunge in half-year net profit to $35 million, and in August of the same year, a further 20% profit tumble to $252 million, unnerving the market.
A report by Jarden last month warned dividend growth would remain entirely flat unless Spark drastically slashed its massive spending. It’s a problem for the company, which is shifting its focus toward high-growth digital infrastructure—specifically data centres, which require large amounts of investment.
Spark’s recent first half year showed some green shoots - net profit recovering to $64m as a result of cost-cutting, momentum in its mobile division, and the hiving off of 75% of its data centre business to Australian private equity firm Pacific Equity Partners (PEP), generating $453m in proceeds.
But with revenue at Spark forecast to remain flat over the next three years, investors continue to take a dim view of the company’s prospects.
The telco’s projected full-year EBITDAI (earnings Before Interest, Tax, Depreciation, Amortisation, and Investment Income, a measure of how well the company has contained its costs) is set at $1.01 billion to $1.07b. Last year the figure was $1.06b.