Why this Telstra-linked ASX small cap stock just crashed 90%

This small cap is having a very bad session. What's going on?

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It has been a very disappointing session for owners of BSA Ltd (ASX: BSA) shares.

The ASX small cap stock was down as much as 90% to a low of 9.4 cents in morning trade.

Its shares have recovered a touch since then but remain down by 83% at the time of writing.

A man slumps crankily over his morning coffee as it pours with rain outside.

Image source: Getty Images

What is this ASX small cap stock?

BSA is an Australian owned and operated services provider.

It notes that it has over 25 years' experience delivering fixed-line and wireless telco services, smart metering services, and premium electric vehicle charging solutions.

It provides these services to Australia's household brands, including the NBN Co, Foxtel and Telstra Group Ltd (ASX: TLS).

Why is it crashing deep into the red today?

Investors have been selling off this ASX small cap stock today after it released a very worrying update this morning.

According to the release, the company has been verbally notified by NBN Co that, at this stage, it has not been selected as a preferred tenderer on the new NBN Field Services Contract.

As a result of this notification, BSA advised that it believes an award will be unlikely and steps are being taken to try and optimise its position in relation to the tender outcome and is planning for all eventualities. The tender was being pursued in a teaming arrangement with UGL.

The current NBN Unified Field Operations contract, with an expiry date of 30 September 2025 (along with extension options, at NBN's discretion, up to a maximum of a further 12 months), remains in place.

However, the contract has no volume guarantees to date and the company has not received any notifications around volume changes through to the expiry of the current term of the contract.

How big a blow is this?

This is a massive blow to the small cap ASX stock. It highlights that the current NBN contract represented approximately 80% of its revenue in FY 2024.

Commenting on the news, the company said:

At this stage, no further information is available. The Company has been planning for a range of tender outcomes and will now assess the impact of this development along with actively evaluating all strategic options to mitigate the impact if BSA is not successful in this tender. BSA will update shareholders as further details emerge. BSA will continue to keep the market informed in accordance with its continuous disclosure obligations.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Small Cap Shares

Man with a surprised expression on his face as he looks at his computer screen.
Small Cap Shares

Could this exciting growth stock be set to triple? Morgans thinks it can

This stock is a must watch.

Read more »

Hand stacking increasing piles of rocks.
Small Cap Shares

Why investors should be targeting ASX mid-caps and ASX small-caps after earnings season: Expert

A new report suggests there is upside for smaller equities.

Read more »

A police officer points their detector at a speeding car.
Small Cap Shares

Why is this ASX small cap up 160% to get an ASX 'speeding ticket'?

Let's take a look.

Read more »

Five young boys wearing small caps sit on a bench together watching a baseball game.
Small Cap Shares

2 ASX small-cap shares to buy and 1 to sell: Experts

The ASX Small Ords Index is down 9% in 2026 versus a 2% bump for the broader ASX All Ords.

Read more »

$50 Australian dollar note on top of a plant pot.
Small Cap Shares

This profitable ASX small-cap just posted record results

This unglamorous operator is building a surprisingly attractive growth engine.

Read more »

Construction worker celebrates success in a tunnel.
Small Cap Shares

Can this ASX small-cap share price keep running into reporting season?

While most of the local share market has gone nowhere fast this year, one small cap has left the benchmark…

Read more »

A man surrounded by huge piles of paper looks through a magnifying glass at his computer screen.
Small Cap Shares

2 ASX small-caps with 40% upside

These two companies are worth monitoring.

Read more »

A man in trendy clothing sits on a bench in a shopping mall looking at his phone with interest and a surprised look on his face.
Small Cap Shares

Leading fund manager reveals 2 exciting ASX shares to buy

These businesses could be little-known, exciting options.

Read more »