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Stock Commentary

Xurpas suspension to be lifted after 16 months in limbo

Merkado Barkada
Xurpas suspension to be lifted after 16 months in limbo

The PSE gave notice that it will lift its suspension of Xurpas [X 0.55 susp] on Monday, after X revealed that the backdoor listing transaction with Wavemaker US had been effectively terminated in December of 2020 after both parties failed to sign final documents on the deal, but that it didn’t receive formal notice from Wavemaker US about the termination of the deal until December 2021.

X said that it had not acquired any shares in Wavemaker US, and Wavemaker US (nor any of its owners or employees) had acquired any shares of X (as had been contemplated as part of the deal).

The PSE said that X will resume trading on Monday, January 17th, but with no static thresholds.

MB BOTTOM-LINE

Feels like an odd situation to have a deal die in 2020, and then to just sit quietly for an entire year in suspension.

It feels like there’s a really long story that we’re not being told about why X would just sit on its hands for so long, knowing that the Wavemaker US deal was effectively dead.

Perhaps it was holding out hope that it could renegotiate the terms of the deal to extend the deadline?

These sorts of deadlines are just terms that have been agreed to between the parties, so it’s something that can be changed if both sides want to move forward. I have no information at all here about what might have happened, I’m only speculating.

X last traded at P0.55/share, but it’s been so long since X last traded that the PSE isn’t even going to provide ceiling or floor protection; sort of like the PSE’s way of letting “nature” sort it out.

I think there’s a legitimate discussion to be had about whether it’s appropriate to allow a company to be suspended for 15 months, but maybe it’s going to be a difficult sell to get the PSE to cull dead ducks like X when it’s scrambling to list whatever it can to bolster its roster of listings.

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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.
PHILIPPINE STOCK EXCHANGE XURPAS INC.
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