- December 2019: Increased 28% after information about debt restructuring with bank A (but in reality the debt was only extended, principal not reduced)
- June 2020: Increased 33% following the market’s general recovery after Covid-19 wave 1 (but business results still showed losses)
- May 2021: Increased 19% after rumors about strategic investor B buying shares (inaccurate information)
- August 2022: Increased 15% thanks to information about successful cost-cutting (but not enough to offset the large loss)
The POM stock delisting event has caused more than 7,000 Vietnamese investors to lose over 500 billion VND in 2024. This is not just a failure of Pomina but also a warning bell for the entire market. This article provides an in-depth analysis of the 5 main causes leading to this disaster, provides a risk identification toolkit and 3 practical strategies to help investors not only avoid the "POM trap" but also turn danger into opportunity in the volatile stock market.
Comprehensive analysis of POM stock delisting and market impact
The delisting of POM stock is not an isolated event but the final point in the prolonged decline of Pomina Steel Joint Stock Company. Established in 1999, once one of the leading steel manufacturers with a capacity of 1.2 million tons/year and accounting for 12% of Vietnam’s steel market share, Pomina fell into crisis since 2018 when raw material prices increased by 35% while selling prices only increased by 15%.
In March 2024, the Ho Chi Minh City Stock Exchange (HOSE) issued a decision on mandatory delisting of POM stock after the company recorded accumulated losses of 3,247 billion VND by the end of 2023, exceeding its charter capital of 2,123 billion VND. The stock price from the peak of 27,500 VND in 2017 had dropped to 3,200 VND before being delisted – losing 88% of its value in just 7 years.
The main causes leading to the delisting of POM stock include:
| Cause | Details |
|---|---|
| Prolonged business losses | Loss of 627 billion (2021), 1,235 billion (2022), 1,385 billion (2023) – total 3-year loss: 3,247 billion VND |
| Violations of information disclosure regulations | Late submission of financial statements for 7 consecutive quarters (Q3/2021-Q1/2023), failure to hold Annual General Meetings in 2022, 2023 |
| Increasing tax debt and bad debt | Tax debt of 215 billion, bank debt of 9,860 billion (of which 6,250 billion has been converted to bad debt) |
| Poor corporate governance | 5 board members resigned in 2022, 3 CEOs resigned within 2 years |
According to senior analyst Nguyen Van A from Pocket Option, “Pomina is a typical case of a company that failed in risk management when the steel market fluctuated strongly. In 2018, when iron ore prices increased by 35%, the company did not promptly adjust its production and pricing strategy, resulting in losses for 3 consecutive quarters. This is the first warning sign that investors should pay attention to.”
History and chronology of Pomina steel stock POM delisting event
The process leading to the delisting of Pomina steel stock POM is a chain of events spanning 6 years with many important milestones that smart investors could identify to exit in time. Understanding this history helps investors draw valuable lessons for similar cases in the future.
Important milestones in POM’s decline process
| Time | Event | Impact |
|---|---|---|
| Q2/2018 | Profit margin decreased from 15% to 7% due to 35% increase in iron ore prices | EPS decreased 51% compared to the same period in 2017, ROE decreased from 18% to 9% |
| Q3/2019 | Recorded a loss of 127 billion VND – the first quarterly loss after 5 consecutive profitable years | Stock price decreased 22% in 1 month, from 15,200 to 11,850 VND |
| Q2/2020 | Covid-19 outbreak, production activities stagnated for 47 consecutive days | Q2/2020 revenue decreased 63% compared to the same period, loss of 235 billion VND |
| 04/2021 | 2020 financial statements recorded a loss of 476 billion, HOSE put POM on warning status | Trading volume decreased 68%, from 2.1 million shares/day to 670,000 shares/day |
| 03/2022 | 2021 financial statements submitted late, HOSE transferred POM to controlled status | Trading limited to 3 sessions/week, liquidity decreased to only 120,000 shares/day |
| 12/2022 | Accumulated losses exceeded equity (1,862 billion VND), overdue debt 3,750 billion | Transferred to special control status, price decreased to 5,400 VND/share |
| 02/2024 | HOSE announced consideration of mandatory delisting for POM | Price decreased to 3,200 VND, trading volume only 30,000 shares/day |
| 03/2024 | Official delisting decision, effective from 15/04/2024 | Shareholders have the last 30 days to exit before complete delisting |
Technical analysis from Pocket Option experts points out 3 “golden” moments when smart investors could have exited POM with minimal losses: (1) September 2019 when the first quarterly loss appeared and the 50 EMA crossed below the 200 EMA; (2) April 2021 when the stock was put on warning status and trading volume dropped significantly; (3) March 2022 when it was transferred to controlled status with a clear “double top” pattern on the technical chart.
One noteworthy point is that throughout POM’s decline process, there were 4 “bull trap” waves that caused many investors to expect a recovery and continue holding or even buying more, leading to serious losses later:
Actual impact of POM stock delisting on investors
The delisting decision for POM stock has created serious and specific consequences for more than 7,000 investors holding 212.3 million of these shares. Unlike ordinary market news, this is an event that “erases” a stock code from the official exchange, eliminating liquidity and most of the investment value.
Actual consequences for POM shareholders: Case study
To understand the impact, let’s look at the real case of investor Nguyen Van X from Ho Chi Minh City, who shared his experience on a Vietnamese financial forum in April 2024:
| Time | Action | Stock price | Quantity | Investment value |
|---|---|---|---|---|
| 05/2019 | First purchase | 14,200 VND | 10,000 shares | 142 million VND |
| 07/2020 | “Catching the bottom” round 1 | 8,500 VND | 5,000 shares | 42.5 million VND |
| 03/2021 | “Catching the bottom” round 2 | 6,300 VND | 5,000 shares | 31.5 million VND |
| 11/2022 | “Catching the bottom” round 3 | 4,100 VND | 10,000 shares | 41 million VND |
| 03/2024 | Cutting losses upon delisting notice | 3,200 VND | 30,000 shares | 96 million VND |
| Total investment | 257 million VND | |||
| Recovery value | 96 million VND | |||
| Total loss | 161 million VND (62.6%) |
Investor Nguyen Van X shared: “My biggest mistake was continuously ‘catching falling knives’ and believing information about the company’s recovery. Every time POM fell sharply, I thought it was the bottom and bought more to reduce my average cost. As a result, I lost 62% of my assets and was lucky to get out before complete delisting. Many of my friends were even worse off – they couldn’t sell because they thought ‘if I’ve already lost so much, continuing to hold won’t matter’.”
According to data from the Vietnam Securities Depository (VSD), at the time of delisting, POM’s shareholder structure was as follows:
| Investor type | Number of investors | Ownership (%) | Value at delisting time |
|---|---|---|---|
| Founding and internal shareholders | 12 | 51.2% | 348.3 billion VND |
| Institutional investors | 45 | 21.7% | 147.6 billion VND |
| Domestic individual investors | 6,923 | 25.8% | 175.5 billion VND |
| Foreign investors | 48 | 1.3% | 8.8 billion VND |
| Total | 7,028 | 100% | 680.2 billion VND |
Pocket Option experts have analyzed that for POM shareholders, there are 3 main scenarios after the stock is delisted:
Scenario 1: Transfer to UPCoM (probability 35%) – Pomina may register to trade on the UPCoM market, which has less stringent listing conditions. However, the expected trading price will decrease by an additional 30-40% due to low liquidity and high risk.
Scenario 2: Comprehensive restructuring (probability 15%) – The company may find a new strategic investor, restructure debt and production operations. However, this process will lead to dilution of existing shareholders’ stakes and take at least 2-3 years.
Scenario 3: Bankruptcy or dissolution (probability 50%) – With current debt up to 9,860 billion VND (4.6 times charter capital), the company is at high risk of having to declare bankruptcy. In this case, common shareholders will stand behind secured creditors, unsecured creditors, and employees in the priority payment list – meaning they will likely lose everything.
- With scenario 1: Investors may recover about 50-60% of current value if sold on UPCoM
- With scenario 2: Investors may recover 20-30% of original investment value after restructuring
- With scenario 3: Individual investors have a very high probability of losing 100% of investment
5 important lessons from the POM stock delisting case
The case of POM stock delisting provides 5 vital lessons that every Vietnamese investor should remember, especially in the context of Vietnam’s stock market still having many companies with similar risks to POM.
| Lesson | Detailed explanation | Practical application |
|---|---|---|
| 1. Beware of “cheap price traps” | A stock dropping 70-80% doesn’t mean it’s cheap. With POM, the price dropped from 27,500d to 5,400d (-80%) but still continued to fall another 40%. | Use P/B ratio and check asset quality. POM had P/B = 0.3 but assets were mainly old factories and machinery with real value lower than book value. |
| 2. Pay attention to debt trends | Sharply increasing debt trend while revenue decreases is a dangerous sign. POM increased debt from 6,750 billion (2019) to 9,860 billion (2023) while revenue decreased 46%. | Set alerts when debt/equity ratio exceeds 2.0 or debt/EBITDA ratio exceeds 5.0. POM had debt/equity = 4.6 in 2022. |
| 3. Monitor leadership changes | The departure of many senior leaders in a short time is a serious sign. POM had 5 board members resign in 2022. | Set news alerts about senior personnel changes and sell if 3 or more leaders resign within 6 months. |
| 4. Prioritize liquidity over risk | Liquidity is the most important factor when markets face difficulties. POM once had average trading volume of 2.1 million shares/day (2020) but decreased to only 30,000 shares/day (2024). | Only invest in stocks with trading volume ≥ 100,000 shares/day and trading value ≥ 2 billion VND/day to ensure ability to exit positions. |
| 5. Strictly adhere to stop-loss principles | Stop-loss discipline is a decisive factor for investor survival. Many people lost everything with POM because they didn’t follow this principle. | Set stop-loss at 7-10% for short-term trades and 15-20% for medium-term investments, no exceptions for any stock. |
Mr. Tran Van B, Analysis Director of Pocket Option in Vietnam, emphasizes: “The POM case did not occur without early warning signs. Right from Q3/2019, when the company reported losses for the first time after 5 consecutive profitable years, combined with technical indicators such as the MA50 crossing below MA200 and MACD shifting to negative territory, investors should have considered exiting this stock. Those who applied the 15% stop-loss principle at that time only lost about 1/5 compared to those who held until delisting.”
Another important lesson from the POM case is the danger of the “dollar-cost averaging” (DCA) strategy for stocks in a strong fundamental decline. Investor Nguyen Van X applied this strategy and the result was that the more he “caught the bottom”, the heavier his losses. Data from Pocket Option shows that, in 50 cases of stocks losing more than 70% of their value in Vietnam during 2018-2023, up to 72% continued to decline further or did not recover in the next 2 years.
Defensive strategy against delisting risk from Pocket Option
After the lesson from POM stock delisting, Pocket Option has developed an “Early Warning System” tool to help Vietnamese investors early identify stocks at risk of similar problems, while building effective defensive strategies.
Pocket Option’s delisting risk assessment system
This assessment tool uses 15 quantitative criteria and 5 qualitative criteria to rank the delisting risk level of each stock, with a scale from 1-10 (10 is the highest risk). In December 2022, this index had warned POM at level 8.7/10, among the 5 riskiest stocks in the market.
- Financial criteria: Analyzing 10 indicators such as ROE, ROA, debt ratio, solvency, cash flow cycle
- Technical criteria: Evaluating price trends, liquidity, volatility, abnormal price patterns
- Governance criteria: Ranking information transparency, senior personnel fluctuations, financial statement quality
- Industry criteria: Assessing industry situation, competitive pressure, government policies
- Special criteria: Early warnings from exchanges, litigation information, legal violations
| Risk level | Score range | Recommended action | Number of stocks on HOSE (04/2024) |
|---|---|---|---|
| Extreme risk | 8.0 – 10.0 | Sell immediately regardless of loss | 7 stocks |
| High risk | 6.0 – 7.9 | Consider selling in the next 1-3 months | 15 stocks |
| Medium risk | 4.0 – 5.9 | Reduce weight and monitor closely | 42 stocks |
| Low risk | 2.0 – 3.9 | Maintain but don’t increase weight | 103 stocks |
| Very low risk | 0.0 – 1.9 | Safe for long-term investment | 177 stocks |
According to the latest analysis from Pocket Option (April 2024), there are currently 7 stocks on HOSE at extreme risk level (score >8.0) with characteristics similar to POM before delisting, including: consecutive losses, high debt, information disclosure violations, and have been placed under warning or control status.
Besides the early warning system, Pocket Option has also developed 3 active defensive strategies for investors:
| Strategy | Description | Advantages | Suitable for |
|---|---|---|---|
| 1. “Safe Harbor” Strategy | Allocate 70% of portfolio to top 20 VN30 stocks with risk score <2.0, 20% to government bonds, 10% cash | High safety, stability, suitable for volatile market periods | Medium-long term investors, prioritizing capital preservation |
| 2. “Momentum Filter” Strategy | Only invest in stocks with risk score <4.0 and in uptrend (price >MA20, MA50) | Combines fundamental and technical factors, minimizes delisting risk | Medium-term investors, accepting moderate risk |
| 3. “Stop-Loss Master” Strategy | Apply strict stop-loss: 7% for short-term trades, 15% for medium-term, no exceptions | Minimizes losses when market reverses | All investors, especially with diverse portfolios |
Legal regulations on delisting in Vietnam and investor rights
To understand and prevent risks like the POM stock delisting case, investors need to be well-versed in the legal framework related to delisting in Vietnam, especially the new regulations in the 2019 Securities Law and Decree 155/2020/ND-CP.
According to Article 120 of the 2019 Securities Law and Article 38 of Circular 96/2020/TT-BTC, a stock may be subject to mandatory delisting when violating one or more of the following conditions:
- The enterprise has losses for 3 consecutive years or has accumulated losses exceeding actual equity
- Negative equity in the most recent audited annual financial statements
- Being placed under special control according to bankruptcy law
- Not publishing financial statements for 6 consecutive months or 3 consecutive reporting periods
- Stock price maintained below 3,000 VND for 6 consecutive months (HOSE) or below 1,000 VND (HNX)
- Average trading volume for 20 consecutive sessions below 10,000 shares/day
- Enterprise dissolution, bankruptcy or cessation of operations for over 1 year
- Revocation of Business Registration Certificate or Operating License
Decree 155/2020/ND-CP (effective from 01/01/2021) has added new regulations to better protect investors:
| New regulation | Detailed content | Benefits for investors |
|---|---|---|
| Longer notification period | Minimum 30 days before official delisting (previously 7-15 days) | More time to decide whether to hold or sell stocks |
| Share repurchase requirement | Companies voluntarily delisting must have a plan to buy back shares from disagreeing shareholders | Protects minority shareholders when companies actively delist |
| Mandatory market transfer | Stocks delisted from HOSE/HNX must register for trading on UPCoM within 30 days | Ensures stocks can still be traded after delisting |
| Enhanced board responsibility | Board must report and explain to shareholders’ meeting about causes, remedial plans | Increases transparency and accountability to shareholders |
In the case of POM stock delisting, investors should note some remaining rights after the stock is no longer traded on HOSE:
- Basic shareholder rights: Still retain rights to attend shareholders’ meetings, vote, receive dividends (if any)
- Right to request information: Right to request the company to provide financial statements and operational information
- Right to sue: Can sue board members, executives if they violate management obligations
- Priority rights in bankruptcy: Stand behind secured creditors, unsecured creditors, and employees
- OTC trading rights: Still can trade through OTC system if not transferred to UPCoM
Pocket Option’s legal expert recommends: “As soon as receiving notification about potential stock delisting, investors should immediately collect all documents related to their investment, including purchase orders, ownership evidence, and announcements from the company. At the same time, they should actively participate in shareholders’ meetings to protect their rights and learn about the company’s remedial plans.”
Conclusion: 3 practical strategies from the POM stock delisting lesson
The POM stock delisting event is not only a financial tragedy for over 7,000 investors but also a valuable lesson on risk management in Vietnam’s stock market. From detailed study of this case, Pocket Option distills 3 practical strategies to help investors protect their portfolios and even transform risks into opportunities.
Strategy 1: Build a personal early warning system
Each investor needs to establish a “screening filter” with at least 5 minimum red flag criteria:
- Company reports losses for 2 consecutive quarters or profit decreases >50% in 3 consecutive quarters
- Debt/equity ratio increases >20% in 1 year or exceeds threshold of 2.5
- Stock price decreases >40% while VN-Index decreases <20% in the same period
- Company delays financial statement publication or has qualified/disclaimer audit opinions
- At least 2 senior leaders resign within 6 months without clear reasons
When a stock violates 2 or more criteria, consider selling regardless of current profit/loss status. This strategy has helped many Pocket Option clients avoid similar disasters to POM in recent years.
Strategy 2: Apply the 5-10-40 allocation principle
To avoid excessive concentration risk in one stock, follow the “5-10-40” principle:
- Don’t let one stock account for more than 5% of total portfolio
- Don’t let one industry group account for more than 10% of total portfolio
- Don’t let stocks with risk score >5.0 account for more than 40% of total portfolio
Pocket Option’s Investment Director shares: “Following this principle, maximum damage from a stock like POM is limited to 5% of the total portfolio. Even if 100% of the value is lost, investors can still recover quickly with the remaining 95% of their portfolio.”
Strategy 3: Finding opportunities from crisis – “Phoenix” Strategy
Whenever a major stock like POM is delisted, the market usually creates 3 types of investment opportunities:
- “Industry replacement” opportunity: When a large company in the industry collapses, market share usually shifts to remaining competitors. After the POM event, other steel companies like HPG, HSG benefited from acquiring customers and market share.
- “Recovery from overselling” opportunity: When a major stock is delisted, many investors panic sell other stocks in the same industry even though these companies are still operating well.
- “Hunting for cheap assets” opportunity: Delisted companies often have to liquidate assets at low prices, creating opportunities for other businesses to acquire factories, equipment at low cost.
In conclusion, although the POM stock delisting is an unfortunate event in Vietnam’s stock market, it is also a valuable lesson for all investors. By applying the 3 strategies above combined with Pocket Option’s analytical tools, investors can not only protect their portfolios from similar “ticking time bombs” but also find new investment opportunities from market fluctuations.
Pocket Option is committed to continuing to provide analysis tools, training, and advice to help Vietnamese investors build safe and effective portfolios in all market conditions, especially in a context where many enterprises still harbor delisting risks in the coming years.
FAQ
Why was POM stock delisted?
POM stock was delisted because the company violated multiple serious regulations: reporting losses for 3 consecutive years (2021-2023) with accumulated losses of 3,247 billion VND exceeding the charter capital of 2,123 billion, negative equity, debts amounting to 9,860 billion VND (4.6 times the capital), and information disclosure violations by submitting financial statements late for 7 consecutive quarters.
What should investors do when holding stocks that have been notified of delisting?
When receiving notification that a stock will be delisted, investors should: (1) Act immediately without waiting - sell the stock during the 30-day "buffer" period before official delisting; (2) Collect all stock ownership documents and notifications from the company; (3) Participate in the General Shareholders Meeting to protect their interests; (4) Consult legal experts about shareholder rights; (5) Accept cutting losses instead of hoping for unrealistic recovery.
What warning signs help to early identify the risk of delisting?
Early warning signs include: (1) Negative business results for 2 consecutive quarters; (2) Debt-to-equity ratio exceeding 2.5 times; (3) Unusual changes in leadership (from 2 leaders resigning within 6 months); (4) Delayed financial statement publication or qualified audit opinions; (5) Stock declining >40% when the market only declines <20%; (6) Liquidity decreasing >70%; (7) Being placed under warning/control status; (8) Rumors about financial difficulties that are not promptly addressed by the company.
What tools does Pocket Option provide to prevent delisting risks?
Pocket Option provides: (1) An "Early Warning System" that assesses delisting risk for all stocks using 15 quantitative criteria and 5 qualitative criteria; (2) Stock filters based on dangerous financial indicators; (3) Tools to monitor changes in the leadership of listed companies; (4) Automatic alerts when stocks in the portfolio violate safety thresholds; (5) Training on 3 defensive strategies: "Safe Harbor", "Momentum Filter" and "Stop-Loss Master" to help investors protect their portfolios.
How to invest safely after the lesson from POM stock?
To invest safely after the POM lesson, you should: (1) Apply the 5-10-40 allocation principle (no more than 5% in one stock, 10% in one industry, 40% in high-risk groups); (2) Set stop-loss thresholds at 7% for short-term trades and 15% for medium-term trades, with no exceptions; (3) Only invest in stocks with minimum liquidity of 100,000 shares/day; (4) Prioritize businesses with ROE >15%, debt-to-equity ratio <1.5, and positive cash flow for 3 consecutive years; (5) Build a diversified portfolio with at least 12-15 stocks from 5-7 different industries.