Its share price tumbled 29.27% or 18 sen to a 52-week low of 43.5 sen yesterday, wiping RM49.5 million off its value. Its market capitalisation, which stood as high as RM790 million in early January ended at RM116 million yesterday.
The huge fall in the company’s share price is a continuation of a selling spree that started last week after announcing it had acquired a minor stake in BSL Corporation Bhd, a manufacturer of consumer electrical and electronics (E&E) components.
In a Bursa Malaysia filing last Wednesday (March 15), Computer Forms said its wholly owned unit, CFM Printing & Stationery Sdn Bhd, had subscribed an aggregate of 110.1 million right shares and excess right shares of BSL at an issue price of 5.5 sen each.
This amounted to RM6.06 million, or 5.7% equity interest of BSL’s enlarged share capital.
The nosedive in its share price began the following day, and it has since fallen 66.28% in the last five trading days (March 16-22), erasing RM227.44 million from its market capitalisation.
Computer Forms had cited the “continuing growth in the E&E industry” as the main reason for subscribing to the BSL shares.
BSL manufactures printed circuit boards, precision metal parts, tools, dies, forges and base metal components.
Can’t stop the bleeding
Despite a good start to the year, its share price has performed disastrously. Year-to-date, it is down 83%, or RM2.13, from RM2.57 at the start of the year. It hit its 52-week high of RM2.96 the day after the EV deal was announced on Jan 5.
On that day, Computer Forms was basking in the spotlight after securing a lucrative 50-50 joint venture (JV) with Thailand’s EA Mobility Holding Co Ltd (EA).
The deal even gained the stamp of approval from Prime Minister Anwar Ibrahim after a courtesy call from EA’s CEO Somphote Ahunai and his delegation to Putrajaya.
Anwar immediately took to social media to highlight the “RM5 billion JV”, and referring to Somphote as the “Elon Musk of Thailand”.
The computer forms printer and distributor made the news again on Feb 21 when it reported net profits were down 73% to RM74,000 for the third quarter ended Dec 31,2022.
Bursa’s UMA query
On March 8, Bursa Malaysia Securities slapped the company with an unusual market activity (UMA) query after its share price plunged 30%.
It responded to the UMA stating it was “unaware” of any other corporate development or rumours relating to the company and its subsidiaries’ business and affairs that could have contributed to the stock price fall.
Another major development was the news on March 9 that Fitters Diversified Bhd had purchased RM34 million worth of stocks and warrants in the company.
Fitters, which is in the fire solutions and property development business, expressed confidence that Computer Form’s tie-up with EA Mobility would help to increase the use of EVs by up to 37% from 2022 until 2040.
Interestingly, Fitters subsequently clarified that its largest shareholder Pang Chow Huat is also a major shareholder in Computer Forms. Pang owns 48.05 million shares or a 7.9% stake in Fitters and 145.17 million shares or a 54.25% stake in CFM.
Fitters may well be regretting its investment in Computer Forms given that the latter’s share price has tanked more than two thirds since its acquisition.