Apollo Global to list 250 billion shares from past share swap, debt conversions

Apollo Global Capital [APL 0.13 11.76%] was in the news again, this time for a notice that the company would be listing over 250 billion in common shares that were issued to various shareholders in transactions from 2017. These are the share-swap transactions that were performed to “backdoor” JDVC Resources onto the PSE through APL.

The transaction itself is a lot like the ones that we’ve seen recently with Prime Media Holdings [PRIM 2.60 1.56%] and the Philippine CollectiveMedia Corporation, where the shareholders of the non-public company are issued shares in the public “backdoor” company, in exchange for their shares in the non-public company.

This made JDVC a subsidiary of APL, and in the process, APL issued a megaton of shares to JDVC shareholders. The shares have always been shown as “issued” and “outstanding”, but until this move, they were not yet “listed”.

MB BOTTOM-LINE

The change doesn’t do anything to existing APL shareholders. It doesn’t dilute shareholders because the shares that will be listed have already been issued and have already been considered “outstanding”. For stock price valuation purposes, and for individual percentage ownership purposes, the 250 billion shares to be listed already exist and are accounted for. By listing the shares, the former JDVC owners will now be able to trade their APL shares on the open market just like everybody else.

APL shareholders might look at this and wonder if some of the former JDVC shareholders might be looking to take some money off the table through the sale of shares, and that certainly could be possible.

There are no lockup restrictions on the newly listed shares, and there’s nothing to stop any of the significant shareholders from trimming their positions ahead of the FOO. That said, I have no information to suggest that any of those major shareholders might be looking to sell, it’s just important to remember that it’s possible, especially if you’re one of the thousands of basura-season traders that got made into long-term investors by APL’s sudden fall from grace in January. Keep your eyes open. This group has not operated with urgency, but things could change.

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