RS shares plunge nearly 30% for 2nd day on woes of major shareholder
Fall also triggered by entertainment and media company’s plummeting net profit
Shares of RS Public Co Ltd (RS), a well-known Thai entertainment and media company, continued their downward trend from the previous day. At 11.35am, the share price stood at 2.62 baht, a decrease of 1.12 baht, or 29.95%, with a trading value of 7.33 million baht.
Meanwhile, shares of its subsidiary, RSXYZ Pcl (RSXYZ), also continued to fall, following the same trend as RS. At 11.35am, the stock price was 0.89 baht, down 0.26 baht, or 22.61%, with a trading value of 36.46 million baht.
Earlier reports indicated that major shareholder Surachai Chetchotisak, who holds 22.32% of RS shares (487 million shares) and 16.35% of RSXYZ shares (257 million shares), was forced to sell his holdings due to pledging of the stocks outside the market to the tune of 1 billion baht. This led to a sharp drop in RS's stock price, which hit the floor on Tuesday.
Broker sources have revealed that the rapid decline in RS stock price on January 7 and continued selling pressure on January 8 may be linked to forced sales, likely through investment tools such as block trades in single stock futures or margin borrowing outside of the typical market mechanisms (off-market share pledges).
"Leverage of RS and RSXYZ shares for liquidity has been a long-standing practice. This approach was feasible during stable or bullish market conditions. However, as multiple cases emerged and share prices faced persistent selling pressure, maintaining liquidity became unsustainable. Compounding this issue is the RS Group's financial difficulties, which have deterred interest in big lot transactions," the source said.
When contacted, RS executives acknowledged the forced sale situation. They added that discussions were underway to assess the impact and provide further clarification.
A key factor to watch is the upcoming Q4 2024 financial results. For the first nine months of 2024, RS reported a net profit of just 12.21 million baht, a sharp decline of 1.354 billion baht, down 99.10%, compared to the same period in the previous year, when they earned 1.366 billion baht.
This significant slowdown in performance highlights a liquidity crisis at RS. The next major concern is the company's ability to repay its creditors, as available capital is becoming increasingly constrained.
