Merkado Barkada
September 25, 2024 | 8:00am
DITO CME [DITO 1.91, down 1.6%; 252% avgVol] [link] has deferred its planned follow-on (FOO) offering to give “potential investors asking for additional time to further evaluate this investment opportunity.” The FOO, which was already approved by the PSE and expected to start its offer period on Thursday, was intended to both fund DITO’s continued roll-out of its network and keep the company on the right side of regulatory compliance after its string of sales at P1.00/share (par) to mysterious companies registered in the Cayman Islands and Singapore. DITO abandoned its last attempt at a FOO offering (in January 2022) just two days before those stock rights shares were scheduled to list, citing “less than ideal market conditions and other perceived risks.”
MB bottom-line: At least this time they pulled the plug before people paid for shares. Maybe that’s the organizational learning the company took from getting fined by the PSE for what it did two years ago. Technically, DITO was supposed to have priced the offer on Monday, so perhaps BDO Cap encountered significant pushback from its institutional and international leads while it was doing the call-around to taste the market’s interest. Taking DITO at its word, though, it’s hard to see what “more time” would do for investors. All of the biggest questions that I have about the future of the company are tied to things not currently in the public domain, and can be boiled down to one question to serve as the avatar for this situation: Who is the true beneficial owner of the Summit and Xterra sharers, and what is their interest in Dito Telecommunity? DITO shares dropped nearly 2% on the news, just a few centavos away from its 52-week low.
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