GCash’s post-listing price drop stirs mixed views

MANILA, Philippines — GCash’s listing success should be measured by its ability to expand the business and unlock value, rather than by its share price  performance, according to analysts.

In a blog post, US-based analyst Eric Jurado scored investors who quickly called GCash’s listing a failure after it ended last week at P6.27 apiece, following a debut at P6.60.

Jurado said the initial public offering (IPO) is a single-day event, but the business is a long-term proposition, highlighting GCash’s upside as shown in its financial performance.

Jurado reminded investors that GCash leads financial technology in the Philippines, dominating its peers with a user base of 41.5 million monthly. GCash generated P10.82 billion in profit and P43.27 billion in revenue in the first half.

Further, Jurado said a falling price opens opportunities for investors to buy in at a cheaper cost. He also raised the possibility that GCash’s initial pricing might be too optimistic.

“The key distinction is simple – price is visible, value must be assessed,” Jurado said.

However, some analysts, including like F. Yap Securities Inc., took a more  pessimistic view of the price drop, saying GCash had failed to attract the new investors they had expected.

F. Yap Securities said the IPO price of P6.60 was already a 34-percent discount from the ceiling of P10, and still failed to hold, adding the listing “came and went without lifting the market.”

“We would watch whether GCash can hold its offer price once early stabilization fades. A slide below it would weigh on appetite for the IPO pipeline the PSE is hoping Mynt would unlock,” F. Yap Securities said.

GCash’s parent, Mynt Inc., was the most actively traded stock yesterday, with its share price at P6.27 apiece.