“The conversion from a public entity into a private company will allow the Company to timely address evolving market demands and rapidly changing customer needs without compromising its business strategies to competition,” RWM
Its like a dejavu. A gaming company doing an IPO then delisting with a tender offer price of half of what they sold in IPO. RWM IPOed in 2013 at P11.28 per share. And now its going to delist and offering to buy out the minority shareholders for P5.50 per share. Its the exact same playbook as MRP. Minority shareholders be damned. Sell high, buy low.
So if you bought RWM and thinking that you are helping a company succeed, you just lost half your money. You should think twice next time of trusting people. Especially if you find these names in the upper management and directors:
I’m not gonna whine about this since I don’t own the shares. I have my own share of experiences with situations like these. The stock market is really a brutal place. For those of us who just wants a bargain, IPOs probably would not be a place to look. And its for a good reason. Almost all of these IPOs are overpriced. So value investors should stay away from them.
How to Avoid This?
Just don’t buy IPOs. RWM at 5.50 today is probably at a fair value. But the IPO price is most definitely not. And you also had the chance to buy RWM at 3, if you waited a bit after the IPO. So not buying IPO is safer.
Another way to avoid this is to remember all the names of the directors and managements. Since these people already demonstrated their attitudes towards minority shareholders. I would think twice buying companies with these people on the board from now on.
Here are the people behind MRP with the same playbook:
The PSE is thinking about revising the rules with regards to delisting. A lot of these companies are just taking advantage of the minority shareholders. I think its about time that they do.
On the brighter side, at least they are not like Calata. At least these companies actually offered a tender.