By Lourdes O. Pilar, Researcher
NEWS of telecommunications firm Now Corp.’s purchase of bid documents for the third player selection, followed by its decision to sue the National Telecommunications Commission (NTC) over the terms of reference sent its stock price moving last week.
Data from the Philippine Stock Exchange showed the Velarde-led firm trading P660.5-million worth of 119.9 million shares from Oct. 8-12, making it the tenth most actively traded stock last week.
On a week-on-week basis, its share price was down by 23.2% to P5.61 apiece last Friday from its closing price of P7.3 on Oct. 5. However, Now shares are still up by 96.8% year to date.
“Most of the activity came from when the news regarding the third telco bidding was released… More trading even came about when Now made headlines saying they were planning to sue the NTC for a supposed ‘money making scheme,’” said Regina Capital Development Corp. managing director Luis A. Limlingan.
“This news created a shift in sentiment, which added to the volatility of the stock,” he added.
Christopher Adrian T. San Pedro, certified securities representative at Unicapital Securities, Inc., concurred: “Investors sold on the news fearing that this move would delay the bidding process of the new major player, which is due on Nov. 7.”
In a statement last Tuesday, affiliate Now Telecom Company, Inc. said it filed the case against the NTC at the Manila Regional Trial Court (RTC) Branch 42, questioning certain items in the terms of reference for the new telco player such as the “(1) P700 million ‘participation security’; (2) P14 to P24 billion performance security; and (3) P10-million non-refundable appeal fee,” claiming these are barriers to entry and that the terms were changed without being disclosed during public hearings.
The company asked for a 20-day temporary restraining order (TRO), but was rejected by the RTC in an Oct. 12 order, saying that Now’s petition failed to meet the standards for issuing a TRO. Specifically, it failed to prove its “unmistakable right” to be protected by a TRO, the “urgent necessity for such relief, and the “serious damage” that will ensure if the order is not issued, adding that the performance security is “contingent” upon Now Telecom being declared the winning bidder.
Now Telecom had likewise sought a preliminary prohibitory injunction, which is scheduled for Oct. 23 and 24 this year.
Prior to filing a case versus the NTC, Now Telecom bought selection documents last Monday, firming up its interest to participate in the bidding.
The deadline for submission of bids is set to be on Nov. 7, and the awarding of the third telco before Christmas.
Regina Capital’s Mr. Limlingan gave Now’s support and resistance levels of P4.5 and P6, respectively.
For Unicapital’s Mr. San Pedro: “I expect the stock to maintain its volatility as it consolidates between a P4 support and P5.94 resistance in the short term.”
Now reported a P5.82 million net income in the first half of the year, 158% more than the P2.26 million in 2017’s comparable six months. The company likewise cited a 29% increase in its gross revenues to P87.38 million during the same period from P68.1 million.
