How Zetrix bet on its future and lost two-thirds of its value
KUALA LUMPUR: Zetrix AI Bhd's bet on its own shares seems to have been a bad call for the artificial intelligence and blockchain company after its share price slumped nearly 67 per cent in just four trading days.
The slump, equivalent to RM3.55 billion in market value being wiped out between Aug 27 and Sept 2, came after Zetrix had been buying back its shares on the open market between January and August.
Zetrix purchased about 123.29 million shares during the eight months — including 32.46 million in July and August alone — for a total cash outlay of about RM94.2 million.
While a share buyback can signal a company's confidence in its own prospects and may be intended to increase shareholder returns, the margin call and forced selling involving shares held by its managing director and single-largest shareholder Wong Thean Soon reversed that trajectory.
On Aug 28, just two days after Zetrix made its last share buyback of 933,300 shares at 66.5 sen apiece, Wong disposed of 99.8 million shares at 29.9 sen apiece, at a time when the counter had traded around 60 sen earlier in the day.
He also offloaded two blocks of shares through his private vehicle Asia Internet Holdings Sdn Bhd on Aug 27 and 28. Some 4.29 million shares were disposed of on Aug 27 at 60.6 sen apiece, followed by another 52.3 million shares on Aug 28 at 48 sen apiece.
Over the two trading days, Wong and Asia Internet disposed of a total of RM57.5 million worth of shares as the stock tumbled.
However, it is unclear whether the disposals were part of the forced sale involving Wong's shares.
During an emergency conference call with analysts and investors, Wong acknowledged the margin pressure, saying he needed time to resolve the forced sales involving his accounts.
While Wong faced margin calls on his accounts, Zetrix is potentially sitting on millions of ringgit in paper losses on the shares it had repurchased so far this year. Zetrix's share price had not fallen below 60 sen before Aug 27.
The Main Market technology counter began 2026 at 81 sen and rose to a year-high of 89.5 sen on April 21, before gradually declining to trade between 68.5 sen and 79 sen in July.
When the company made its last purchase before the rout, Zetrix paid 66.5 sen apiece. The stock closed at 66 sen that day before falling 6.5 sen, or 9.85 per cent, to 59.5 sen on Aug 27.
VALUATION GAP WIDENS
Zetrix was already trading well below its historical valuation before the sell-off.
Based on its Aug 26 closing price of 66 sen, the stock's trailing price-to-earnings (P/E) ratio stood at 5.3 times, a 62 per cent discount to its five-year average of 14 times, MyBursa data showed.
The P/E ratio measures how much investors are paying for each ringgit of a company's earnings. Zetrix's forward P/E of 4.7 times was also 65 per cent below its five-year average of 13.5 times.
The subsequent share-price collapse pushed that discount substantially wider.
By Aug 31, Zetrix's trailing P/E stood at 2.2 times, an 84 per cent discount to its five-year average of 13.9 times, while its forward P/E of 2.1 times was also 84 per cent below its five-year average of 13.4 times.
FROM 'BUY' CALL TO CUT-LOSS
Earlier in the month, when Zetrix closed one sen, or 1.42 per cent, higher at 71.5 sen on Aug 11, Rakuten Trade Sdn Bhd issued a short-term "Buy" call on the stock.
It recommended an entry price of between 72 sen and 75 sen and set a target of 80.5 sen, saying early recovery signs were emerging at the time and the earlier downtrend appeared to be easing.
Its cut-loss level was set at 68 sen. By Aug 26, the stock had already fallen below that level, closing at 66 sen. Four trading sessions later, it was worth 22 sen — a decline of 44 sen, or 66.67 per cent.
Heavy selling in Zetrix shares came amid speculation linking the company to former human resources minister Datuk Seri M Saravanan, who was charged on Aug 28 with three counts of corruption involving RM1.097 million.
Zetrix categorically denied being implicated in or associated in any way with Saravanan in relation to the charges.
In its response to Bursa's UMA query, the company said it understood that what it described as "unfounded rumours or speculation" linking it to Saravanan may have contributed to the unusual trading activity.
It said enquiries with its directors, major shareholders and other relevant parties had not uncovered any undisclosed corporate development, including negotiations or discussions, that could account for the trading activity.
At the time of writing on Sept 3, Zetrix was the most actively traded stock as it entered its fifth straight day of decline, falling another 1.5 sen, or 6.82 per cent, to a multi-year low of 20.5 sen, with more than 209 million shares changing hands.
At that price, Zetrix had a market capitalisation of about RM1.65 billion, compared with roughly RM6.53 billion at 81 sen at the start of the year — a 74.7 per cent loss in market value. - NST 4 September 2026
