MRC Allied moving into ICT industry with P75-M investment in Bitstar Prime

MRC Allied [MRC 1.45 unch; 66% avgVol] [link] confirmed that its initial investment into Bitstar Prime Holdings (BITSTAR) will be P75 million. The MRC board approved the purchase of the stake to give MRC a controlling interest in BITSTAR; once the transaction to acquire control is completed, the board will authorize MRC to assign to BITSTAR its interest in Kerberus Corporation (to be renamed Bitstar Telecom), and its interest in PT&T Corporation [PTT suspended]. MRC will also cause BITSTAR to subscribe to P1 billion worth of convertible preferred shares in PTT. The company said that it hopes to finalize the MRC subscription in BITSTAR before the end of January 2024. 

MB bottom-line: This is all part of MRC’s “business plan to become a significant player in the fast-growing Information and Communication Technology industry”, but it’s not clear yet what niche MRC has planned for BITSTAR in that marketplace. Regular telecoms like Globe [GLO 1730.00, up 0.6%; 267% avgVol] and SMART [TEL 1297.00, up 1.3%; 87% avgVol] are stale, and their upstart competitor, Dito Telecom [DITO 2.50, up 2.0%; 115% avgVol], is wildly unprofitable and drowning in US-denominated debt. Other connectivity leaders like Converge [CNVRG 9.35, down 3.6%; 150% avgVol] have seen growth slow and profitability crumble. The flashy entrance of Starlink and the self-congratulatory “connecting the unconnected” storyline have yet to produce more than photo ops and media hits. The money and connections here make it worth following, but I don’t see the strategy yet.

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