Premiere Horizon Alliance 'cancels' 2018 property dividend

Premiere Horizon Alliance [PHA 0.18, down 1.6%; 247% avgVol] [link] gave notice that its 2018 property dividend has been canceled due to PHA’s failure to obtain regulatory approval. The dividend in question was declared back on March 20, 2018, and was meant to distribute 268 million shares of Redstone Construction and Development Corporation to PHA shareholders. The PHA board met on December 11 and decided to cancel the property dividend to avoid violating the SEC’s prohibition against the distribution of unauthorized property dividends. PHA is best known for Marvin Dela Cruz’s failed backdoor play to list his e-payments app company, SquidPay, and all of the legal infighting that has since occurred between the new and old guard, and even between members of Marvin Dela Cruz’s own ownership team.

MB bottom-line: Sure this was six years ago, but this dividend declaration was a very significant event in PHA’s trading narrative in 2018. The stock rose 47% over a three-week period leading up to the dividend declaration on March 20, with nearly 200 million shares of volume over that span. A lot has happened to PHA in the intervening years, but that price action doesn’t lie: the prospect of this dividend was a major inducement for investors to purchase shares in the stock. Why is PHA so silent on the nature of its failure to obtain regulatory approvals? The framing of the disclosure makes it sound like something that just “happened” to PHA, but in my experience, these kinds of failures are usually not the normal outcome of the reasonable efforts of a competent management team. As if we didn’t need any more reason to demand reform of the property dividend rules. This is really frustrating. Not for the owners of the company, of course. Whoever they are.

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