The wheels came off the wagon for Jumbo share price as Temasek Holdings, along with several other major shareholders, sold off their stakes in Jumbo Group between 2017 and 2018. The flurry of selling activities saw Jumbo share price collapsing from a high of $0.72 in early 2017 to the current $0.40. Will Jumbo share price ever see daylight?
Listed in SGX Catalist only in 2015, Jumbo share price enjoyed a spell of bullish run between 2015 to 2017. For Jumbo share price, it seemed like the sky was the limit as the counter reached an euphoric high of $0.72. 2017 was supposed to be a milestone year for Jumbo as it celebrated its 30th anniversary. But in a twist of fate, Jumbo share price spiralled out of control after Temasek Holdings reduced its shareholdings and sold its majority stake to Ron Sim (founder of OSIM) in 2017.
As there are big boys involved in this counter, Jumbo share price is expected to be quite volatile. This is especially so given that the free float is only 22.9%. This means that any movements made by the major shareholders would have significant influence on Jumbo share price.
Jumbo share price in turmoil
As a venture capitalist, Temasek Holdings’ strategy is to invest in high growth companies and exit after a few years. Of course, Temasek Holdings do have long-term stakes in companies such as DBS, Singtel, CapitaLand, Tencent, Alibaba, etc. But these are strategic investments with enormous market scales and tremendous growth potential. While Jumbo Group do have growth potential, its revenue and profit seemed to have stalled in recent years. Thus, part of the reason for the decline in Jumbo share price could be attributed to the declining business fundamentals.
The turmoil of Jumbo share price certainly left a bitter taste among investors, who must be wondering if Ron Sim would be the next to sell down his 10% stake. This predicament of Jumbo share price is nothing new among newly listed companies. That is why I have often avoided investing in IPOs within the first five years.
Jumbo share price could have suffered a worse fate if the management had not intervened and launched a series of share buy-back in 2018. As at 31 December 2018, 741,700 shares had been held as treasury shares. The share buy-back helped to provide support for Jumbo share price.
Notwithstanding the upheaval in Jumbo share price, this counter is [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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