True Corporation Public Company Limited (TRUE)’s share price surprisingly surged for 2 consecutive days last week, its peak was on Monday 28th, December as the price jumped more than 7%.
The share price has spiked amid the spreading of rumors that the judgement of the TRUE-TOT dispute would be positive for TRUE.
A day later, TRUE announced that the Central Court’s judgement to dismiss TOT Public Company Limited (TOT)’s claim in ADSL dispute, as a consequence, TRUE has no obligations to make payment of 76,200 million baht for a breach of contract.
The conflict between TRUE and TOT occured in 2005 as TOT had filed an arbitration claim against TRUE, claiming that TRUE was in breach of the Joint Operation and Joint Investment Agreement in providing high speed internet service and has demanded the return of 2,000 million baht for the damages.
Later in 2015, TOT submitted a request to alter the damage claim to 63,500 million baht with the interest 22,700 million baht, totaling 86,200 million baht and in September 2018, the Central Administrative Court ruled the judgment to enforce TRUE to pay a penalty of 76,200 million with interest.
With the penalty as high as 76,200 million baht, it has always been a pressure on TRUE’s price because of concerns that TRUE would lose a lawsuit.
Subsequently, the performances were unsteadily since then…despite having a profit of more than hundred thousand millions baht. The net profit stood around 5,000-7,000 million baht, representing a net profit margin of 3-4%.
Meanwhile, the share price barely moves or nearly flats over the years, even though there was some speculation but unstable.
Therefore, there is widely expected TRUE to win a lawsuit, in order to reduce stress and anxiety of investors who have TRUE on their portfolio.
However, please note that the aforementioned dispute’s final decision is yet to be made. And do not be shocked by the collapse of 8.02% in TRUE’s share price on last 30th December, it was the Sell on Fact.