Happy Tuesday, Barkada --
The PSE closed up 15 points to 7305 ▲0.2%.
Bitcoin plummets 20% overnight, reaching levels that we haven't seen since way back in (checks notes)... last week.
Shout-out and thank-you to /u/strykrz for their suggestion of a new "MB Fintech Index" to track the fortunes of our baby fintech industry. I love the idea, but aside from (eventually) SquidPay, it's difficult to get a market price for our SMART and Globe fintech subsidiaries. But if we can get a second... I'm in.
Thank-you to /u/LemmeGnaw for the MB appreciation, and to /u/interneurosphere and /u/tagongpangalan for helping me identify some scripting issues with my /r/PHinvest post. Hopefully I'll have that fixed today!
Shout-out also to long-time reader, Washington, for reaching out with praise for yesterday's article. Thank you for the feedback! It's good to hear from people when something resonates enough that they feel compelled to write in and let me know!
Daily meme | Join MB | Today's email
COVID Update
WW: 90715886 PH: 487684 Top 3 MB indices:
Fast Food ▲2.85% Telco ▲1.85% 2019 IPOs ▲0.89% Bottom 3 MB indices:
Media ▼2.51% MiddleClass ▼0.77% #COVID-19 ▼0.71% Main stories covered:
[UPDATE] Basic Energy Corp [BSC 0.47 0.00%] trading suspension will lift tomorrow at 9am... trading of the company’s stock was suspended a week before Christmas when MAP 2000 Development Corporation (M2DC) agreed to buy 67% of BSC, and the PSE applied the backdoor listing rule which requires a stock to be suspended until the company that got backdoored provides “comprehensive disclosure” about the transaction and what will happen next. BSC provided disclosure yesterday, and so the PSE said that the suspension in trading would be lifted on Wednesday before the start of trading. As per the disclosure, M2DC is paying a little over ₱2.8bn for 67% of BSC (₱0.285/share); and M2DC “believes that the Company is a perfect vehicle for its investment in the energy sector.”
- MB: The price M2DC paid is a 39% discount from BSC’s December 18 closing price of ₱0.47/share. BSC said that the price was negotiated based on the “potential growth” of the company, and the findings of M2DC’s “legal, tax and financial due diligence” that it performed on BSC. As John Mangun wrote nearly 3 years ago, trying to find a candidate company for a backdoor listing “is like trying to find two matching socks in the dark while hurting from a massive hangover.” When one company acquires the stock of another, it also acquires all the rights and liabilities attached to those stocks as well... and sometimes, it's easier to simply sell yourself at a discount (as BSC did) than it is to resolve all the problems that get discovered during the due diligence phase.
[NEWS] COL Financial [COL 46.50 ▲1.53%] was halted after change in par value from ₱1/share to ₱0.1/share... the change was approved by the board in Feb 2020, approved by shareholders in June 2020, and now approved by the SEC last week. The change in the par value price doesn’t have any impact on the price of the stock, or the number of shares outstanding. According to COL, from its June 11, 2014 note on Sinophil’s change in par value, “The change in par value merely shifts amounts from one equity account to another (from capital stock to additional paid in capital). However, more importantly, total capital remains unchanged.”
- MB: Par value is nothing to worry about. There’s no new money, and no change in the number of shares, so there’s no change in price. It’s just an accounting move.
[NEWS] Megawide [MWIDE 8.50 ▲2.16%] to JV with the City of Cebu on Cebu Carbon Market redevelopment... the project includes the “construction, development, and operation of mixed-use assets on the project site”, and comes with a 50-year concession with the option for a 25-year extension. For its part in the joint venture, MWIDE will invest ₱5.5bn over the life of the project, and the City of Cebu will provide “exclusive use and possession of the project site”. According to ABS-CBN, “aside from the revamp of the 24/7 Carbon public market, Megawide will develop a wholesalers hub, a transportation hub, a lifestyle village with shops and restaurants, a ""boqueria"", an airport check-in hotel, and a park with a chapel.” MWIDE estimated the project to take about 5 years to complete.
- MB: MWIDE has to fill its construction dance card if it eventually ends up not winning the NAIA Rehab bid. In the event it wins the NAIA Rehab bid AND has to do the Cebu Carbon Market, well... too much work is a way better problem than “no work at all”.
[NEWS] Petron [PCOR 3.97 ▲7.01%] investing ₱3bn in Bataan refinery... the investment came after PCOR was granted authority to include its massive refinery in the Freeport Area of Bataan. Inclusion in the freeport addresses the taxation issue that PCOR believed to unfairly disadvantaged its refinery’s product. Without this accommodation, PCOR was prepared to permanently close the refinery.
- MB: It’s not clear what changed behind the scenes, because it’s nearly impossible to conceive a situation where a massive conglomerate like San Miguel [SMC 130.80 ▲1.08%], run by exceedingly competent executives, would not have been aware of the Freeport Area of Bataan. The whole story is told to us like PCOR just suddenly got this crazy idea, and then when they told the Department of Energy, the Department of Energy was like “oh, yeah, that’s absolutely fine”, and then everything just magically resolved. I don’t buy it. But, regardless, the refinery remains open and even receives a significant re-investment by PCOR.
MB is posted to /r/PHinvest every Monday and Wednesday, but my newsletter goes out daily. To stay in the loop for daily email delivery, please join the barkada by signing up for the newsletter, or follow me on Twitter.
No comments:
Post a Comment