Is This How COM7 Going to End?

The situation of Com7 Public Company Limited (COM7) is on the verge of huge falls after continuous selloff from investors without forewarning. The share sank as much as 12% on January 3, 2019.

A landslide of COM7’s price on that day was due to the report that Apple Inc. had cut its fiscal revenue forecast from $89-$93 billion to $84 billion, claiming that the decline was due to the economic slowdown in China. The news reflected bad sentiment to COM7 as a seller of Apple’s products, causing a panic in the market even though it may have been a short negative sentiment.

The cut in revenue forecast by Apple may be one of the many factors, that causes the once top pick in Thailand’s tech group, COM7, to fall. After checking COM7 historical trading, it is evident that a selloff had occurred even before the forecast cut by Apple.

 

The selloff started in the middle of December 2018 from ฿19.80/share on December 13, 2018, and then the share continued to slide to ฿13.50/share on January 4, 2019.

Is it possible that the selloff was done by proprietary trading or major shareholders, who were willing to cut loss before everything went down to zero, because a selloff from individuals would not have damaged COM7 to plunge more than 31% in three weeks.

The incident that is happening now is similar to the one in 2016. The share price of COM7 was reaching higher and higher each day, but a sudden selloff came from the company’s three major shareholders and some other shareholders that decided to sell a total of 60 million shares, totaling 5% of its paid-up capital at an average price of ฿12.75/share. The reason for the selloff was to increase liquidity in the market.

 

The situation is contradictory with COM7’s strong revenue in the past quarters. The company is a major retail IT vendor in Thailand with a total of 518 branches including BaNANA, Studio7 and BKK. In the 3Q18 financial statement, 59% of its revenue was from mobile phone sectors, while IT products gave 21%, accessories yielded 16% and services granted 4%.

By the looks of its structure, the share is still very strong and the decline should be only for a short period, unless it is a selloff from major shareholders that decided to abandon the ship before it is too late.

The latest report came on January 7, 2019, from COM7 saying that its executives “did not” sell COM7’s shares which leaves only proprietary trading as the prime suspect in this selloff.