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Stock Commentary

DDMP shares owned by DoubleDragon and the Yujuicos come out of lockup tomorrow

Merkado Barkada
DDMP shares owned by DoubleDragon and the Yujuicos come out of lockup tomorrow

While the lockup technically ends on September 20th, the shares owned by DDMPR’s sponsor, DoubleDragon [DD 10.00 1.19%], and the Yujuicos will not become tradeable until the 21st.

DD has 7,903,519,158 set for release (44.33% of DDMPR’s outstanding shares), Benedicto Yujuico has 1,720,739,589 shares set for release (9.65%), and Teresita Yujuico has 1,666,469,340 shares (9.35%) that will come out of lockup tomorrow.

Together, that’s 63.33% of DDMP's [DDMPR 1.78 1.11%] common shares that should now be considered “in play”. When companies go through an IPO, the exchange’s rules (PDF) require that any shareholder with an interest of 10% or greater in the company must submit their shares to a 180-day or 365-day lockup, depending on certain criteria. While the Yujuicos both own less than 10% of DDMPR, their pre-IPO holdings before the dilution brought on by the IPO itself caused their holdings to become subject to this rule.


MB BOTTOM-LINE

 It’s probably not that big of a deal that DD’s shares are an exciting lockup, since the company doesn’t appear to need short-term capital, and it just recently had an opportunity to sell as much DDMPR as it wanted to just 6 months ago when it sponsored DDMPR’s IPO. I could be wrong, but I think it’s safe to consider DD’s 44.33% to be “settled” and inactive (for now).

The real question for DDMPR investors is what will happen with the shares held by the Yujuicos; will they continue to hold the shares, or will they look to sell for personal reasons that we might not know or understand? The Yujuicos is a deeply connected family with considerable resources, but that doesn’t exempt them from perhaps wanting to pull some money off the table and sell some shares.

Will they do it? We can’t know for sure, but it’s important to consider their 2.3 billion shares as “potentially active”. DDMPR has a daily average volume of about 10 million shares, so their holdings represent about 230 trading days’ worth of volume.

That’s nearly an entire year’s worth of stock. I’d bet the family is too savvy to fire-sale DDMPR stock in such a way so as to crater the price. They’re clearly not going to exit quickly, as they were likely also presented with the opportunity to sell shares into the IPO during the offer period 6 months ago, but the point of this section is just that these are significant shareholders with huge positions and investors need to pay a little bit of attention to that. 

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Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.

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.

DOUBLEDRAGON PROPERTIES CORP. PHILIPPINE STOCK EXCHANGE
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