KUALA LUMPUR: Shares of XOX Bhd plummeted today, following the company's proposal to reduce its share capital by RM303 million to clear accumulated losses.
The proposed share consolidation has an ex-date set for July 29, 2024, with an entitlement date on July 30, 2024.
At the time of writing, the counter was down half a sen or 33 per cent to one sen, valuing the company at RM51.91 million.
Throughout the trading session, the stock opened at one sen, reached a high of 1.5 sen, and fell to a low of half a sen.
The stock was one of the most actively traded counters on Bursa Malaysia, with some 125.9 million shares changing hands.
A market observer suggested that the share consolidation could be the reason behind the steep decline in share price. However, he also pointed out that the company's earnings have significantly declined over the past five years, and its highly volatile share price could also be a contributing factor.
Last month, XOX announced plans to consolidate every 30 of its shares into one share, effective a month after its proposed share capital reduction to offset accumulated losses.
The mobile network operator, currently operating at a loss, said the share consolidation is a strategy to enhance its capital structure.
The company said the proposal will not affect the overall value of shares held by shareholders.