Stock Commentary

Quick Take: 2GO's looming PSE exit and 2 more market updates

Merkado Barkada
Quick Take: 2GO's looming PSE exit and 2 more market updates

2Go Logistics [2GO suspended] [link] will be delisted from the PSE on July 17, 2023. The company will delist with SM Investments [SM 927.00 1.4%; 72% avgVol] owning 67.2% of 2GO’s outstanding shares, and Singapore-based Trident Investments holding 31.73%. Approximately 1.06% of 2GO’s outstanding shares were not offered to SM as part of the tender offer, and those shareholders will continue to hold their shares in 2GO even as the company delists in July.

MB Quick Take: Not much to say here, except that this is a pretty good demonstration of what happens at the end of a successful tender offer. SM didn’t need to soak up 100% of the public float, and there’s a little more than 1% of 2GO’s shares that were not tendered to SM as part of the tender offer deal. Nothing will change for those shares that didn’t tender. The owners aren’t forced to sell, they’re just not able to use the infrastructure of the PSE to facilitate the buying and selling of their shares.

Discovery World [DWC 1.46 4.6%; 249% avgVol] [link] is pushing P2 million into a new solar power subsidiary, Viper Energy Corp (VEC). DWC will be buying P2 million of VEC’s initial P10 million of authorized capital stock. VEC is intended to act as a holding company “for solar energy assets in its operating sites”, and for “future solar energy projects that the DWC Group may undertake”.

MB Quick Take: Aside from having a kick-ass name that reminds me of my late-80s / early-90s childhood, I think it’s smart when companies segregate little sub-components of their business like this. Sure, it comes with some overhead in setting up and maintaining a separate company, but it can be useful to DWC shareholders if VEC can translate its experience into more substantial “future solar energy projects” and attract some outside investment.

AREIT [AREIT 34.15 0.4%; 127% avgVol] [link] declared a Q1/23 dividend of P0.52, payable on June 16 to shareholders of record as of May 31. The dividend has an annualized yield of 6.09% based on the previous closing price, which is unchanged from its pre-declaration annualized yield. The total amount of the dividend is P916 million, which is 91% of the P1,012 million in distributable income that AREIT reported for the quarter. Relative to AREIT's IPO price, the dividend increased AREIT's total stock and dividend return to 47.19%, up from its pre-dividend total return of 45.26%.

MB Quick Take: AREIT’s stock price has taken an absolute beating from inflation and the unprecedented string of rate hikes, but thanks to being first (and under-priced), most IPO buyers have been well-rewarded for their patience. AREIT’s dividend is remarkably stable. Through twelve dividend declarations, AREIT has never declared a smaller dividend. It's stability with a bias towards growth.



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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.





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