BIZ BUZZ: No red flag in a cheaper Mynt

A lower offer price for GCash operator Mynt Inc. should not automatically be taken as a warning sign, according to COL Financial chief equity strategist April Lynn Tan.

Mynt has set a maximum offer price of P10 per share, although analysts have been weighing the possibility of a lower final price.

For the glass-half-empty crowd, a cheaper valuation could suggest that the company is struggling to attract investors.

Tan, however, sees another explanation: The stock market is simply too weak to support a more aggressive price.

“The market is really so weak, and if you want to raise capital, then, you know, you have to make the stock more attractive, so you price it at a cheaper price,” she said.

In Mynt’s case, Tan said investors should look beyond the possible markdown and examine the company’s numbers.

The key question is whether its profitability remains on an upward path.

GCash has 41.5 million monthly active users, equivalent to nearly 56 percent of the country’s adult population.

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Its ecosystem also serves 7.5 million active borrowers, 17.9 million savings accounts, 9.2 million investment fund accounts and about 2 million local stock market accounts.

If earnings continue to grow and the business remains attractive, a discounted offer price could provide investors with a chance to buy into the GCash story at a lower entry point.

In other words, the potential discount may say more about the market’s gloomy mood than Mynt’s underlying condition.

For bargain hunters willing to study the numbers, bad market timing could turn into a welcome GCash deal.