MONDE drops after "cornerstone investor" dumps shares overnight

The exact details of the sale are not yet known, but what we know is that an “unaffiliated institutional investor” sold over 271 million shares at P18.80/share, for a total transaction value of P1.4 billion.

The number of shares involved in the sale represents around 1.5% of Monde Nissin's [MONDE 18.62 8.05%] outstanding shares. MONDE’s closing price just before the sale occurred was P20.25/share, and news of the sale caused the stock to open trading at P19.26/share (down 5%), and slowly degrade throughout the trading day to its close at P18.62/share (down 8%).

The overnight sale was a private placement, meaning that the sale was negotiated directly between the buyer(s) and the seller without going through the open market (PSE). Credit Suisse was the bookrunner, meaning that it was the firm contracted by the seller to find interested buyers at the highest price possible.

MB BOTTOM-LINE

MONDE had been on quite a streak recently, up 22% over the past month before yesterday’s trading hammered the stock down to where it was a couple of weeks ago.

We don’t have any information about who the seller is, and why the seller elected to sell, nor can we know for certain whether the 8% drop was entirely due to the feelings generated by the below-market overnight sale.

It’s possible that a certain amount of the drop could also be attributed to the wider market pullback, but it can be difficult to tell how much of one thing or another truly mattered in the minds of the traders that sold (and bought) nearly P2.2 billion worth of MONDE stock yesterday. It’s entirely possible that the original “cornerstone” seller simply needed the cash to take advantage of another opportunity, and was already satisfied with the 39% gain in MONDE’s price from its IPO offer price of P13.50 to the private placement price of P18.80/share.

We’ll just have to wait and see where things go today and tomorrow.

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