Lo and behold! Is this really the light at end of tunnel for SingPost share price? Investors got massively hyped up over announcement of bankruptcy protections for its ill-fated United States subsidiaries, Jagged Peak and TradeGlobal. Under the scheme, SingPost will no longer recognise profit or loss from the toxic subsidiaries. In view of this, is SingPost share price out of the woods?
The latest development marked the end of a dark chapter that started way back in December 2015. Jagged Peak and TradeGlobal were the two major assets acquired under former CEO Wolfgang’s tenure. Within months after the acquisitions, Wolfgang resigned. I do not know what transpired behind the scene. But since the acquisitions, the eCommerce segment had been consistently loss-making and the management struggled to turn the business unit. SingPost share price also plunged from a high of $2.00 to the current $0.93.
Of course, it is not fair to solely attribute the ailing SingPost share price to the two United States subsidiaries. There was also a special audit ordered by regulators in 2015 to look into a possible lack of interest disclosure by one of its former directors, Keith Tay. That saga concerned the acquisition of FS Mackenzie in 2014. The scandal prompted a major management shakeup, forcing Singtel to intervene. SingTel’s Chairman, Simon Israel was swiftly installed as the new Chairman to restore order and to stabilize the situation. These events combined to knock the wind out of SingPost share price.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether SingPost share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
SingPost share price bottomed out?
Including FY2017, the total impairment charges for both Jagged Peak and TradeGlobal amounted to an estimated $307 million. For sure, this is a terrible setback for the venerable institution. On the flip side, the exit of the U.S businesses finally put closure to its overseas e-Commerce misadventure. But whether SingPost share price will turn bullish is another matter altogether.
To be frank, I am very careful not to raise investors’ hope too high. This counter used to be, and still is, a dividend darling. Many members are vested in SingPost shares and understandably, expectation of a long-awaited recovery of SingPost share price had reached insane level. But investors must [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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