DigiPlus down 12% ahead of today's 1.65-B shares listing

DigiPlus [PLUS 13.00, down 12.0%; 601% avgVol] [link] notified the exchange that it would list 1.65 billion common shares on July 25 from a series of subscriptions that were made by a group of buyers (from PLUS’s ownership group) in March 2022 at P1.65/share. The shares have already been counted as issued and outstanding. This transaction only listed the shares which makes them eligible for trade on the PSE’s system.

MB bottom-line: I’m not entirely sure why the market pulled back ahead of this listing. The shares were already “counted” as part of PLUS’s outstanding shares (all shares owned by shareholders) and as part of PLUS’s issued shares (all outstanding shares plus treasury shares). This listing doesn’t change the proportional ownership of any party or reduce the public float in any way, as those changes were already “baked in” when the shares were issued in 2022. Maybe the fear comes from the huge differential between the P1.65/share subscription price and PLUS’s previous-day closing price of P14.78/share, and the implication that the buyers from the March 2022 transaction would dump some of those new shares through the PSE at their first opportunity to do so. It’s possible for the ownership group to sell some shares because PLUS’s public float is 26% and it only needs to maintain above 20% to keep from being suspended, but it’s kind of always been possible for the ownership group to sell some shares during the three-month pump that has seen the company’s share price jump from ~P8.00/share to nearly P15.00/share. Like I’ve said, nothing much will change from this “listing” – for us, or for them. If you were bullish on PLUS then this was probably a buying opportunity.

---

Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.

Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.