Basic Energy [BSC 0.16, down 4.9%; 151% avgVol] [link] disclosed that its chairman, Ramon Villavicencio, will step down as chairman and vacate his position as a board member effective March 31 due to personal health concerns. BSC said that Mr. Villavicencio’s role as Chairman will be assumed by its two Vice Chairs, Oscar De Venecia Jr. and Manuel Gonzalez, and that it will “undergo the proper process in deliberating on the replacing individual for the vacancy.” The Villavicencio Family gained control of BSC in May of 2021 through the backdoor listing of MAP 2000 Development Corp., which is the parent company of Filoil Gas and Energy Company.
MB bottom-line: Reading the tea leaves, this seems to be something of a sudden development that prevented BSC from adequately preparing for an elegant transfer of power to the company’s next chairman. BSC’s stock price dropped nearly 5% on the news, but BSC bagholders probably didn’t even feel that pain: they’ve been suffering since the family took control of BSC and pumped the price of BSC’s stock up to nearly P1.90/share in 2021. It’s down almost 92% over the past three years, down 42% over the past 12 months, and down 19% just from the start of this year. I don’t see a lot of hope for BSC to change that trend in the near future given how sudden this change is and how two incumbents will share the chairmanship while a process gets started to find the eventual replacement. It looks like the stock price is approaching some asymptotic floor, but that’s the thing with stocks: it can always get worse. And it might, here, before it gets better.
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