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Jul 10, 2018 @ 19:38

Move over Lucio Co: D.M. Wenceslao beats Puregold as worst IPO

 

For the last seven years, bilyonaryo Lucio Co’s Puregold has held the title as the worst initial public offering (IPO) in the Philippine Stock Exchange.

But Puregold’s reign as the poster boy for bad IPOs ended last month when D.M. Wenceslao, the builder of Asean City in Manila Bay, made an ignomonious debut in the stock market.

D.M. Wenceslao, which raised P8.15 billion from the sale of 679 million shares at P12, saw its stock nosedive by 14.5 percent on day one. This is the worst performance among 39 IPOs since 2010. Its underwriters are BPI Capital Corp. and Maybank Kim Eng.

This is worse than Puregold’s chart-topping IPO debut in October 2011 when it lost 12 percent on day one Puregold’s lead underwriters were BDO Capital First Metro Investment Corp., HSBC and UBS.

We have to point out that Wenceslao and Co’s pride got hurt more than their wallet because they got the money they wanted.

Bad IPOs are the fault of investment bankers who misread the market as an IPO should be priced lower than what they expected the market to pay for the stock. So if you bought these IPO lemons, you’d probably think twice before buying from these investment bankers.

Here’ are the top IPO busts since 2010:

1) D.M. Wenceslao – down 14 percent (June 2018)
2) Puregold – down 12 percent (October 2011)
3) Store Specialist Philippines – down 11 percent (December 2014)
4) Emperador Inc. – down 10 percent (December 2011)
5) Discovery World Corp. – down 9 percent (November 2013)
6) 8990 Holdings (HOUSE) – down 8 percent (December 2010)
7) Chelsea Logistics Corp. – down 7 percent (August 2017)
8) Harbor Star Shipping (TUGS) – down 3 percent (October 2013)

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