Coal Asia Holdings [COAL 0.20 unch; 22% avgVol] [link] disclosed that its board approved a measure that would change the par value of its capital stock from P1.00/share to P0.10/share. COAL said this was to “improve liquidity” and “boost investor interest”, which together would “shore up the marketability” of COAL’s stock. A reduction in par value from P1.00/share to P0.10/share works like a 10-for-1 stock split, in that it increases the number of outstanding COAL shares by a factor of 10 without changing the proportional value of any investor’s holdings. The change in par value still needs to be approved by shareholders and the SEC before it becomes a PSE reality.
MB BOTTOM-LINE: COAL is one of the PSE’s no-income zombie companies. It has over 17 million metric tonnes of coal reserves but has not produced any coal for years as it has largely squatted on its coal operating contracts. Notably, COAL missed the massive pump in the price of coal that Semirara Mining and Power [SCC 33.20 ?0.5%; 52% avgVol] shareholders rode to great success (and fat dividends). I have no idea what COAL is planning, but I do know that converting COAL’s stock price from P0.20/share to P0.02/share is not likely to inspire a huge amount of investor interest on its own. It’s like in the 90s when video games went through their score creep (why award 10 points for a hit, when 100,000 looks so much better). Crypto went through the same hollow phase where bagholders could buy seven trillion coins for $200. At the end of the day, dividing the value of the company across 10x the number of shares doesn’t make buying 0.01% of the company any cheaper. It just makes it look like a shitcoin.
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