SPH share price plunged to record 14-year low

What a calamity for SPH share price! On 28 August 2019, all hell broke loose for SPH share price as the counter breached the all-critical level of $2.00 to reach a low of $1.93. It seems that dark forces had won the battle as a whopping 3.2 million SPH shares were shorted on 26 August 2016, causing SPH share price to plunge into the deep abyss.

Is it going to get any worse for SPH share price? To be frank, I don’t know but current trading level is at a stunning record 14-year low. During the dark days of the Great Financial Crisis 2009, SPH share price had not even touched such crazy level. So you can imagine the level of panic among shareholders. It seems that SPH share price is currently on a path of destruction and there is no end in sight. At least not so soon.

SPH share price

Confidence means everything in the stock market. Thus, to restore the confidence level of SPH share price, the management bought back 576,300 shares on 26 August 2019. But the action proved to be futile as SPH share price continued to retreat. Against the current backdrop, SPH share is trading at the level below its book value (P/Book Value was 0.947) and dividend yield was about 4.3%.

While SPH is traditionally viewed as a dividend darling, investors must not judge a stock solely on its dividend yield history or projection. It is important to understand the overall business fundamentals, growth outlook and market dynamics before making any stock investments. Then again, the meltdown of SPH share price would have scared the living daylight out of existing shareholders. Would Temasek Holdings intervene and privatize SPH in order to preserve the value in Singapore media conglomerate?

SPH share price lost its way?

SPH share price contrasts greatly to that of SPH REIT unit price, which had been going from strength to strength since IPO in 2013. The bearish sentiments of SPH share price was caused by the disappointing 3QFY2019 results. While its struggle in the media business is well documented, what was shocking to investors should be the stunning extent of the business decline.

Operating revenue dropped 1.6% to $246 million for 3QFY2019 while net profit collapsed 44.1% to $26.2 million. The latest results marked the fourth consecutive quarterly decline. With such financial performance, it is no wonder that SPH share price rolled off the cliff. The burning question among investors must be whether CEO Ng Yat Chung is the right man to turn SPH’s business. Since CEO Ng Yat Chung took over, SPH share price consistently fell from $3.00 to the current $1.93 level.

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It is difficult to assess whether SPH share price will bottom out anytime soon because SPH is undergoing a major business transformation. In my point of view, chances of SPH being privatized 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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