MCOT: Strange Sign.!?

MCOT: Strange Sign.!?

The share price of MCOT Public Company Limited (MCOT) had rallied for 5 consecutive days from November 23 to November 30 before dropping more than 6% on December 1, 2020.


The stock gained slightly 0.71% on Nov 23 before rapidly grew to 14.08% on Nov 24 then moderately rose by 0.62% on Nov 25. Afterward on Nov 26, the share price sharply jumped by 13.50% and rocketed 29.73% at the end of last week (Nov 27) with a trading value of 53 million baht. 


The rally continued until yesterday (Nov 30) as the share surged 6.25% to edge at ฿5.10/share with a trading value of 73 million baht. Normally, the trading value of MCOT is about a hundred thousand baht a day, but last week the value was as high as ten millions baht.  


What happened to MCOT..?


As of now MCOT has neither positive factors nor sentiment to support its stock. The 3Q20 earnings recorded a loss of 105 million baht, bringing the nine-month period to recognize loss totalling 1,167 million baht. Retained deficit (unappropriated) exceeded 2,800 million baht.


There is no improved signal for the last quarter of this year as well, thus expecting MCOT to end this year with loss as usual, stucking in loss for another year. 


Meanwhile, the media business, especially television, is struggling with a continued decline in advertising as we could see from layoff and furlough policies of several media companies.   


Moreover, the Directors keep resigning, totaling 7 since the MCOT-playwork incident. Even though the new Board of Directors has been appointed, the situation of MCOT is likely remainable. 


MCOT recently on Nov 24 has applied for a significant financial loan from Kasikorn bank in the amount of almost 700 million baht with an interest rate of MLR-2.57% per year throughout the loan period not more than 6 years and 9 months or 81 installments for the purpose of undertaking the 2020 employee separation plan.


The compensation for 2600 MHz worth more than 3,200 million baht, which have to share 50-50% with Playwork Co., Ltd. as contracting company, would not enough to force MCOT’s share rally. 


Therefore, shall reconsider carefully before play on MCOT, particularly for a profit taking.