PREIT finishes up 6.66% after huge late push
Premiere Island Power REIT [PREIT 1.60 6.7%] [link] opened for trading yesterday after a very quiet IPO offer period.
The stock opened below its IPO offer price of P1.50/share, and traded as low as P1.40/share, and remained in the low P1.40s for most of the morning session.
We started to see plenty of memes and taunts from around the community, making jokes about “DNA” of Villar stocks, the (initial) huge red candle “hakdog”, and various iterations of the lonely red candle chart. But then the mood all changed.
The super-light volume of the morning gave way to a more persistent volume of buying around mid-day. The price started to lift out of the P1.40s and up around the P1.50 break-even level.
Then, the real “magic” for the Villar Group’s newest REIT came in the final hour, when over 8 million shares were purchased, driving the price up from the P1.50-level to where it closed at P1.60/share, up 6.66%. At the lowest price traded (P1.37/share), PREIT’s estimated 2023 dividend yield was 10.5%. At its closing price, the estimated yield is 8.96%.
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What do we make of all this? The honest answer is that it’s too early to tell. The Villar Family’s other REIT, VistaREIT [VREIT 1.6 1.3%], traded loosely around its IPO offer price of P1.75/share for its first month on the PSE, but that stability quickly faded once the stabilization fund expired and was no longer around to provide price support.
Other “heavy” Villar offerings have shown the same performance tendency, like AllHome [HOME 1.4 1.5%] which also traded loosely around its IPO price up until the stabilization fund expired.
Could PREIT be resigned to a similar fate? It’s possible. The tone of the US Federal Reserve’s interest rate raise yesterday was darker than most expected, and that’s not a great sign for REIT stock prices and valuations.
But maybe the natural downward pressure on PREIT’s stock price is absorbed by the stabilization fund for long enough that something positive happens at the macro level to naturally provide an upward lift, and this whole period of REIT weakness is side-stepped by PREIT and its IPO buyers.
Or, maybe the stabilization does what it can with what it was given, opportunistically picking up shares here and there to give the price a timely boost, only to leave the stock vulnerable to the inevitable once its 30-day lifespan is exhausted? We won’t have long to wait to find out.
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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.
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