DV8 Stock Plummets Amid Trading Restrictions

Market Reacts to Exchange’s Enhanced Supervision

Shares of DV Company 8 Public Company Limited (DV8) experienced a significant drop today, shedding 23.26% by mid-morning. The Stock Exchange of Thailand (SET) has implemented stricter trading measures for DV8, moving its securities to Level 2 supervision.

Stricter Trading Rules Implemented

Beginning July 16th and extending through August 5th, DV8 will trade under an AUCTION system. This prohibits additional Net Settlement, a common practice allowing investors to offset purchase and sale costs. Investors can only submit trading orders during specific pre-opening and pre-closing windows, with the market randomly matching trades three times daily.

Escalating Supervision Follows Unusual Trading Activity

The SEC initially flagged DV8 for Level 1 trading restrictions on May 21st due to significant and unexplained shifts in trading conditions. At that time, trading volume had drastically decreased while the stock price continued to climb, a divergence that raised concerns.

Recent Performance and Tender Offer Concerns

Yesterday, July 15th, DV8 closed at a new high of 8.60 baht, marking a 21.13% increase with 18 million shares traded. This surge propelled the market capitalization to 11,356 million baht from 700 million baht in just three months. However, the company recently announced a tender offer for its shares at a substantially lower price of 0.56 baht per share. The company is also exploring digital business expansion, with investment feasibility studies expected by Q4 2025.

Understanding Trading Measure Levels

The SET employs a tiered system to manage market volatility. Level 1 typically involves cash balance requirements. Level 2, now applied to DV8, adds restrictions on Net Settlement and introduces the Auction trading method. Level 3, the most stringent, includes a one-day trading halt.

Auction Trading Explained

The Auction system replaces the standard Automatic Order Matching. Trades are executed at designated times: 9:50 AM, 2:25 PM, and 4:35 PM. During normal trading hours, orders can be updated, placed, or canceled, but execution only occurs during the auction periods.

Company Clarifies Market Movements

Responding to SET’s inquiry about its stock’s recent performance, DV8 stated that aside from the eight acquisition proposals received on July 11th, there have been no other significant developments impacting its trading. The company pledged to continue monitoring price movements and reporting any relevant information.

Acquisition Proposals Under Review

Earlier this month, DV8 disclosed receiving intentions to acquire controlling stakes from eight entities, including 210K Capital, LP, Cliff Capital Company Limited, and MOON SG Investments PTE. These proposals aim to acquire all outstanding shares at 0.56 baht per share, valuing the total transaction at approximately 742 million baht. The acquisition process is pending regulatory approval.

In a related market development, shares of many technology companies have seen increased volatility this year. For example, U.S. semiconductor stocks experienced a nearly 10% drop in a single week in early June 2024, reflecting broader market sentiment on growth expectations (Reuters 2024).