DELTA: A Low Free Float that Dominate the Market

Recently, Delta Electronics (Thailand) Public Company Limited (DELTA) became the share that had a large influence on SET Index’s movement due to its unusual value of trading over the past few days. 

 

Moreover, the President of SET “Mr. Pakorn Peetathawatchai”, who acts like a spokesperson of DELTA, has guaranteed that there wasn’t any irregularity in DELTA’s movement, confirming the share price of DELTA moved at an outstanding pace was due to the firm’s good earnings. However, its low free float caused the share price to move quickly…That’s it…!!!

 

With a dramatic change that came out of nowhere in DELTA’s value, rumor has it that it was because of some taiwanese “major investor”, who took an advantage from overwhelming orders of Tesla. They invented a story saying that those aforesaid orders would boost DELTA’s profit significantly, in order to improve the share price. As a result, DELTA’s price spiked from 50 baht/share to 838 baht/share, an increase of more than 1,400%. 

 

But why does SET let a “low free float” stock to dominate the market..? As strange price movement has directly affected the SET Index, causing the index to change more than 50-60 points.  

 

DELTA’s current free float is 22.35%, which seems to easily qualify for the basic standard on the face of it, but when re-considered the shareholding structure, there are many private funds that held less than 5%, which could classified as individual investors..and if those groups is cut out, the free float will have less than 10%.

 

However, on Jan 5, SET has enforced a “Cash Balance” measure on DELTA starting Jan 6, 2021 until Jan 26, 2021.