Linkers Industries Ltd. (NASDAQ:LNKS) stock fell sharply on Monday as traders locked in profits following last week’s explosive rally, with the thinly traded micro-cap stock giving back part of its recent gains.
The stock was down more than 18% in midday trading after soaring about 67.5% late last week following the company’s announcement that it would increase its stake in Thailand-based LPW Electronics Co. Ltd.
Profit-Taking Follows Massive Rally
The selloff appears to be driven primarily by profit-taking after Linkers announced a definitive agreement to acquire an additional 29% stake in LPW Electronics for approximately $2.35 million.
The transaction will increase Linkers’ ownership in the Thai wire harness manufacturer from 20% to 49%, strengthening its exposure to the Southeast Asian automotive and electronics supply chain.
After the announcement, the stock surged as momentum traders piled into the low-float name. Monday’s decline suggests many of those investors are now taking profits.
Thin Float Amplifies Volatility
Linkers has a public float of roughly 1.4 million shares, making the stock particularly vulnerable to large price swings.
Such low-float stocks often experience exaggerated moves in both directions as relatively small buying or selling volumes can significantly affect the share price.
While the LPW acquisition could strengthen Linkers’ long-term manufacturing footprint in Thailand, Monday’s trading reflects a cooling of speculative momentum after last week’s outsized rally.
Linkers Industries Price Action
LNKS Stock Price Activity: Linkers Industries shares were down 18.66% at $2.180 at the time of publication on Monday, according to Benzinga Pro data.
Image via Shutterstock