GCash IPO buzz heats up as operator splits stock
The operator of popular e-wallet GCash made its stocks more affordable by slashing the price by 33 percent. This comes ahead of the highly anticipated initial public offering (IPO), a move that has been welcomed by the investors.
On Tuesday, Globe Telecom Inc. announced that its board and shareholders had approved a stock split transaction for Globe Fintech Innovations Inc. or Mynt.
In this transaction, the company will increase the number of its common shares to 71.66 billion from 2.15 billion. However, the par value will be cut to P0.03 per share from P1.
The authorized capital stock post-transaction will remain at P2.15 billion.
“Theoretically, stock splits do not alter the company’s value, but may alter perception by making the stock more liquid and affordable to investors,” Regina Capital Development Corp. head of sales Luis Limlingan explained.
Related to this, Chinabank Securities research director Rastine Mackie Mercado told the Inquirer this “could be viewed as part of the process of GCash’s prospective IPO.”
“This may have been the reason why Globe gapped up at the open, as investors positively reacted to this development,” he added.
Globe shares rose by 0.57 percent to P1,780 at the opening yesterday.
“Notwithstanding, Mynt—wherein Globe has a minority stake in—has continued to post earnings growth amid strong adoption and widening use cases. [W]e currently expect it to sustain this growth path as it continues to gain scale,” Mercado added.
In the first quarter, Globe received P1.8 billion—up 86 percent—in equity earnings from Mynt. GCash, which currently has 94 million users, has been expanding its financial services from the typical money transfers to include stocks trading and even cryptocurrency, among others.
Last April, Globe chief financial officer and treasurer Carlo Puno said the company has been gearing up to be “push-button ready” for the IPO launch. But Puno stressed the need to evaluate the market first before doing so.
Analysts have expressed optimism on GCash finally making its market debut, especially after achieving a $5-billion valuation last year.
