GCash IPO could be delayed by 'Liberation Day'

An executive of GCash [link], one of the largest fintech startups in the country, said that “Liberation Day added a lot of uncertainty” and added, “whether or not [the IPO] happens this year or next year, it’s really dependent on how this whole Liberation Day traffic evolves over the next few months.” Liberation Day is the phrase used by US President Donald Trump to describe the sweeping “reciprocal tariffs” that were applied to all countries based on trade imbalances with those countries. The tariffs were paused for 90 days after Trump received broad-based pushback and triggered a massive sell-off of American assets that is still working its way through the global financial system today. GCash is a subsidiary of Mynt, of which Globe [GLO 2014.00, down 0.4%] and Ayala Corp [AC 549.00, down 1.4%] are beneficial shareholders.

MB bottom-line: It’s fully possible that in waiting for the perfect valuation, the Ayala Family may have overcooked this thing. But even if we were to play the movie forward and imagine that the global tariffs were somehow walked back, and that a consistent global financial recovery from the initial shock of their implementation began, I’m still not confident that the GCash team would “pull the trigger” on the IPO. Would they think that they could get a bigger payday by waiting just a little bit longer? Perhaps they’d wait just long enough for the next black swan financial event to obliterate the recovery’s momentum, prompting an interview with an executive that eerily echoes the one linked above. GCash doesn’t need this money for its business. If they did, they’d take a lower valuation to get the equity needed to grow. Instead, it feels like a bunch of financial investors just want to meet their internal rates of return goals. As per the same executive: “So when the market opens up, if we find a window where the value, the valuations we’re getting and the interest we’re getting is appropriate and acceptable, then we will push that button to trigger the IPO.” Hopefully, they pull it out of the oven before it sets off the fire alarms.

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