NOW Telecom receives SEC approval for ACS increase
NOW Telecom (NOWTEL), an affiliate of Mel Velarde’s publicly-listed NOW Corp [NOW 1.63 22.56%] [link], had its application to increase its authorized capital stock (ACS) from 14.49 million common shares to 952.09 million common shares approved by the SEC.
The SEC also approved NOWTEL’s application to change the par value of its ACS from P100 per share to just P1 per share.
The ACS increase was partially funded by NOW’s P600 million subscription in shares in NOWTEL, which increased NOW’s stake in NOWTEL from 19% to 24.23%.
The SEC also approved NOWTEL’s equity restructuring plan to “fully wipe out” NOWTEL’s deficit , which NOW claims “better positions NOW Tel to take on domestic and foreign equity investors in order to raise capital in support of its growth plans”, which NOWTEL’s COO Rene Rosales said may include taking on debt, selling equity, or both.
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NOW is also hoping to use the recent change in the law to allow up to 100% foreign ownership of public services, like telecommunications companies, to attract interest from potential foreign investors.
Like most NOW press releases, everything here sounds great; what investor wouldn’t want the chance to see their company take on significant investments and grow its footprint?
Yet, for those that have followed this company or have even just casually seen the news whenever NOW pops up, it can be hard to separate the forward-looking statements from the hilarious bluster.
The stock is down 90% from its 5-year high of P15.70 back in early 2018, and it’s down 69% (nice) from its late 2020 high of P5.25 when it was going around loudly proclaiming itself to be the country’s “fourth telecommunications player”, a status that the Department of Information and Communications specifically said NOWTEL did not hold, as it was simply one of 40 telcos in the country.
This is just my personal opinion, but this is the kind of stock that can burn investors that are looking to “bodega” NOW for the chance to get it on the ground floor of something big.
I’m not afraid to miss that initial pop, if anything real actually ever does happen, so I’ll wait and see if the ownership group and executive team can actually complete the “quasi-reorganization”, execute the “strategic initiative”, and deliver on these “growth plans”.
Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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