Billabong to investigate share plunge

Billabong is investigating why its shares plunged by more than 20 per cent in morning trade. Source: AAP

BILLABONG shares have been parked in a trading halt after a surprise sharp sell-off pushed the stock to record lows.

Billabong requested a trading halt after its shares suddenly plunged by more than 20 per cent in late morning trade on Thursday.

The troubled surfwear retailer was unable to explain the falls, which came ahead of next week's deadline for two potential private equity suitors to make up their minds about whether to finalise takeover bids for the company.

"The trading halt is requested pending an investigation by the company into trading levels today," Billabong said in a statement.

The stock fell as much as 22 per cent to a record low of 63 cents in late morning trade.

It was down 11.5 cents, or 14.2 per cent, at 69.5 cents when the trading halt was announced at lunchtime.

IG Markets strategist Stan Shamu said it was hard to gauge what was going on with the stock, which has endured a rollercoaster ride in the past year amid various failed takeover bids.

"The fact that they will be in a trading halt for quite a while as well up until the 25th March really brings into question what the real story is," he said.

"Apart from that everything is speculation more than anything else.

"Some people might think there may be a problem with the bids already."

Two private equity consortiums, Sycamore and Altamont/VF, have made separate offers of $1.10 a share for Billabong.

Both have been running their slide rules over Billabong's books in recent weeks.

The due diligence process is due to end next week.

Billabong plunged into the red with a massive $536.6 million first half net loss.

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