Stock analysts and industrialists in the digital asset business shared their views and the lessons learned after the aborted plan of SCB X group to acquire shares in the crypto exchange market Bitkub Online last week.
Well-known investor and stock guru Niwet Hemavachirawarakorn said the failed share acquisition talks between the SCB X group and Bitkub provided a good lesson for businesses and investors who are interested in trading newly-emerging types of assets including digital ones.
First, you should not be 100% sure that any takeover deal will be successful as intended regardless of the parties involved.
This kind of deal will set the conditions of due diligence which will take time.
Second, if you are the share buyer, you will consider the discount price of the target share price of the companies under the takeover target if it is worth buying. Moreover, you will see if the deal collapses, how much loss you would face.
"If the offered price is already cheap or the share is actually a value stock with a margin of safety, and the reason for taking over is because the price is too cheap, then I will buy. But if not, or the offered price is too high, I will ignore it," he wrote in a column published in Krungthep Turakij over the weekend.
Bitkub Online was offered when everything was extremely hot and the price of Bitcoin, which is the main digital asset on Bitkub Online, was at a new high of US$65,000, double the $32,000 over the four-month period. That was the second jump after it reached $60,000 in March 2021 and then dropped by half to $30,000 in July.
At the same time, Bitkub is the dominant player and influenced the digital asset market with a market share of 90%, while millions of "new gen" investors are flocking to this market. That drove Bitkub's online trading value to a trillion baht a year. With the high premium, Bitkub Online has profit of more than 1 billion baht a year.
SCB X filed to the Stock Exchange of Thailand last week that SCB X Group's planned investment in Bitkub Capital Group Holdings' crypto exchange had been cancelled amid uncertainty over Bitkub's settlement of regulatory issues with the Securities and Exchange Commission.
In November last year the board of SCB Securities Co (SCBS), a subsidiary of SCB X, approved the acquisition of 51% of the shares of Bitkub Online Co (Bitkub) from Bitkub Capital, with the transaction valued at roughly 17.8 billion baht.
Over the past several months, due diligence was conducted on Bitkub. While the results of the due diligence did not reveal any significant concerns, Bitkub is still dealing with various issues as recommended by the SEC, with the timeframe for resolution uncertain.
SCB X and SCBS remain committed to their plan to expand into the businesses related to blockchain technology and digital assets, according to SCB X's filing to the SET last week.
Yuvanart Suwanumphai, senior equity analyst at Finansia Securities, is optimistic about the termination of the deal, saying SCB will have more liquidity to pursue potential investments in the future.
Finansia does not expect that SCB X will pay any special dividends after the deal's cancellation and the aborted deal should positively impact SCB X's share price.
Although there are still uncertainties regarding SCB X's transformation plan, Finansia views its core banking business should still perform well.
Asia Plus Securities (ASPS) stated that it needs to track how SCB X will manage its budget after cancellation the Bitkub deal. The 17.8 billion baht allocated for the planned Bitkub share acquisition might be used to raise dividend payments, buy back shares or build on the growth of its subsidiaries.
Last week Poramin Insom, founder of Satang Corporation, a cryptocurrency exchange operator, said he believes the deal failed for a number of reasons, such as changing crypto market conditions.
From the very active market last year, it has been declining resulting in a sharp downturn in turnover.
The competition in the crypto market is quite high with many newcomers. Gulf Energy Development (GULF) recently announced its partnership with Binance, the world's largest crypto exchange platform, he added.
Mr Poramin believes that in the near future large non-financial firms will enter the crypto market.
Sanjay Popli, co-founder and chief executive of Cryptomind Group Holdings, believes small crypto exchange operators might be consolidated with partners or financial institutions. Bitkub, meanwhile, has to find a new partner which may be a Thai or foreign firm.
Crypto market trends should remain stagnant for at least another year as the world economy slows down, but in the long term, the crypto market still has a bright future, he added.
Suppakrit Boonsat, president of the Thai Digital Asset Association, believes the crypto market will be highly competitive in Thailand due to new players coming in but new players have to offer new products.
