WITHOUT warning, I found my shares in Synergy Grid & Development Phils., Inc. ($:SGP) frozen and cannot be traded.
This was on May 31, 2021 when the stock's last traded price was 395.80 apiece.
Synergy Grid which is owned by Henry Sy Jr., Robert Coyuito, local and foreign institutional investors, and many other small investors and traders was suspended by the Philippine Stock Exchange (PSE) by virtue of Disclosure Notice No. DN00069-2021 dated May 31, 2021.
The bourse said the trading of the shares of SGP was suspended due to its non-compliance with the required minimum public ownership under the Exchange's existing rules and guidelines.
Today at 9:00 a.m., the PSE will resume trading of this stock, as its follow-on-offering has been approved, with an initial valuation of P12 per share.
And so at 9:30 this morning, my shares formerly frozen at P395.8 will only be worth P12.00, and it was announced that there will be no floor price.
Whereas before my position had a loss of 4.03%, now the loss has become 97.10%.
This is a loss of 383.80 per share, and if an original holder of $:SGP has 1,000 shares, this means a clear downside of P383,800.
Analysts and bloggers said at the end of today's trading, $:SGP might be priced at P15.00 which is a little higher than its offer price, and way below its P383.80 original valuation.
For more than five months, I waited for SEC and PSE approvals of whatever circular ownership tricks and shares swap transactions that Sy and Coyuito had been doing so that I could finally exit my $:SGP position.
On top of my actual losses, my greater misfortune is that during the five months that my funds are tied to $:SGP, it was the time when my favorites Globe Telecom and PLDT were in a big rally, and I could have sold my SGP position to shift to $:GLO and $:TEL.
In fine, I already earned sizable amounts from the upticks in Globe Telecom and Philippine Long Distance Telephone, but these profits could have been a lot bigger if my money in $:SGP was not locked.
I am not the only "victim" here for not anticipating the pricing disaster.There are many others.This is the same sentiment of original holders of The Keepers Holdings Inc. ($:KEEPR), but that is another story.
The Professor Blogger said there had been warnings and indication that this will happen because of SGP's move to increase its authorized capital stock, but newbies like me are not aware of these corporate gobbledygook.
The Professor Blogger says these shares swap, corporate layering, etc. are legal, but the investing public is clearly getting the short end of the rope here.
He said in the Philippines, there is a lack of regulatory measures to protect investor rights, unlike in the United States.
The government has imposed on National Grid Corporation of the Philippines (NGCP) to go public and for ten years, it has evaded this responsibility in its service contract with the government.
What happened is that it is SGP and not NGCP that sold more shares, and the proceeds from the sale will be used by SGP owners to buy preferred shares of NGCP.
NGCP remains not a publicly listed corporation and its dividend earnings will be funneled to the public thru SGP -- just a percentage of its actual dividends.
Is this a valid fulfillment of NGCP's requirement to go public?
Why shouldn't NGCP itself conduct an initial public offering (IPO) as required by regulators of the government?
Since this was not done, I believe NGCP is still remiss in its responsibility to the government.
Many felt like they were scammed.