StarHub share price crashed into wall

Since my last coverage, StarHub share price suffered a catastrophic meltdown, falling from $1.55 to the current $1.35 level within the span of only a month. The culprit is, of course, the disappointing 2QFY2019 financial results. Against the backdrop of the persistent bearish StarHub share price, the telco certainly looks like a company in crisis.

When Starhub was booted out of the prestigious Straits Times Index (STI) in 2018 it was a harbinger of things to come. Fellow comrade, SIAEC, suffered similar fate back in 2017 and its share price went into tailspin. On this basis, I don’t see how StarHub share price can fight destiny as its mobile services business is solely entrenched in Singapore.

The massive plunge of StarHub share price since 2015 would have inflicted plenty of heart pains for long-time investors as this counter used to be a dividend darling among Singapore investors. For sure, the entry of TPG had soured the mood for telco stocks and dented the growth prospects for local telco players, which already face a saturated mobile market in Singapore.

As the telco war continues to unfold, I fear the worst for StarHub share price. Make no mistake, the fourth telco has not even started operations yet StarHub share price already collapsed to such outrageous level. I cannot imagine the situation for StarHub share price once TPG starts its operations. Should Temasek Holdings intervene as the sovereign wealth fund holds a 56% stake in StarHub?

In this article, the latest financial results will be examined and I will share my views on whether a “do-or-die” merger between StarHub and M1 is plausible.

StarHub share price in false dawn?

For those who entered into this counter in 2018, they must have bought into the news of massive staff retrenchment that is expected to reduce costs by $210 million over three years from 2019. As a result, Starhub share price went into a frenzy, surging to a high of $2.00 towards the end of 2018.

StarHub share price was also given further boost on news of M1 being privatized. Many investors thought that the same will likely to happen for StarHub. But investors’ fantasy never materialized. Neither is there a consolidation in the market as Keppel, the major shareholder of M1, did not signal any intention to surrender the telco license of M1. Investors were given a rude awakening. In the aftermath, StarHub share price crashed from $2.00 to the current $1.35.

The spiralling StarHub share price has led the dividend yield to [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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