Dominion down 41% in first few days of trading

Dominion Holdings [DHI 1.86, down 3.6%; 902% avgVol] [link], the company that was formerly known as BDO Leasing and Finance but that was renamed in anticipation of a sale that ultimately failed to complete, had its four-year suspension lifted on Tuesday and the stock price has fallen 41% in the first couple days of trading. DHI was down 39% on its first day of trading, which was only possible because the PSE declined to apply the usual trading band guardrails due to the length of DHI’s suspension, despite there being ample historical data on the previous market value of the stock. Yet, even that 39% drop doesn’t tell the whole story, as there were some trades that crossed at P4.50/share after the stock opened at P4.10/share. The second day of trading was more civilized, with DHI opening slightly above its Tuesday close before fading through the day and closing at the session’s low of P1.86/share. Over 6.2 million shares were traded, which is approximately 3% of the remaining public float.

MB bottom-line:  The speculators that purchased DHI at P4.50/share were down 52% on that first day of trading, and while I don’t shed too many tears for those getting burned by jumping in to speculate on a market oddity like DHI, I do object to the exchange’s willingness to permit instances of these “no rules” trading days. This is a weird situation. We have a company that’s been voluntarily suspended for four years coming back to active trading after its parent changed the name and business purpose ahead of a sale that eventually failed. The vibes are all off, and there is no doubt a need for the market to work its “price discovery” magic to figure out fair market value of what these shares now represent through the ever-changing balance of supply and demand for the shares. It feels more appropriate to me–in situations like this where there is historical fair market value information–to keep the trading bands on to let that price discovery process happen without also gamifying the situation into some kind of one-day shitcoin situation. It’s such a weird house rule.

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