Melco Resorts and Entertainment (Philippines) Corporation (MRP) announced today that its Board of Directors approved of the voluntary delisting of the common stocks of the company. This is from the main board of the Philippine Stock Exchange, subject to compliance with the PSE rule on delisting.
In connection to this, MCO (Philippines) Investments Limited, the majority shareholder of the corporation, intends to have a tender offer for up to 1,543,421,147 outstanding common shares of the company.
The tender price is pegged at PHP 7.25 per share. This figure is a 16.7 percent premium versus the Friday’s close.
The company will file the Tender Offer Report with the Securities and Exchange Commission on September 17, 2018. The offer period for the tender offer is yet to be announced.
What Happens When a Stock is Delisted?
Now, investors may be wondering what delisting means. When a company delists from the PSE, it will no longer be tradable publicly. In simple words, you cannot buy or sell the stock using your brokers should you still have the stock after delisting.
You will still have your shares, but selling will be a challenge.
You will become a private investor of the company. All inherent rights such as the right to vote, the right to attend the stockholder’s meeting, and the rights to dividends are still there.
However, the difference is that should you want to buy or sell MRP, you would have to do it yourself without an assistance from your broker. It means that if you will buy, you must look for existing investors who have MRP stocks and buy it from them.
At what price? Only the two of you can set the price.
On the other hand, if you want to sell, you need to find a willing buyer for the stock. At what price? It again depends on the two of you.
Now, another question is, “should I sell now at prevailing market prices or should I wait for the tender offer?”
If you have the stock for a low average, you can do either. Sell now at the market price, anyhow; you will still gain. Otherwise, you can wait for the tender offer and sell it at PHP 7.25 per share.
Should I Buy Now?
The stock closed at PHP 6.90 per share today. Should you have bought at market close, and would opt to sell at the tender price, that would still be a 5.07 percent upside, which is not bad.
The bottomline is to buy as far away as possible from PHP 7.25 and sell as near as possible to PHP 7.25. The decision to buy or sell the security is entirely up to you.
MRP gapped up today but was unable to sustain the run. The 200 SMA acted as resistance for the stock.
Nonetheless, the 15 EMA and 20 SMA may act as support. Volume obviously was enormous due to the significance of the news. MACD poised for a bullish crossover.
RSI is also bullish but is currently at neutral levels. Estimated support is at 6.70 while resistance is at 7.05 and of course, at 7.25.
As of September 10, 2018, at 03:30 PM, the volume of MRP is 799.62% of the previous trading day.
Remember the correlation between price and volume.
- bullish price + high volume = high sustainability (price)
- bullish price + low volume = low sustainability (price)
- bearish price + high volume = high sustainability (price)
- bearish price + low volume = low sustainability (price)
MRP has a MODERATE RISK level due to its risk percentage of 60.07%.
Foreign Fund Flow
MRP registered a Net Foreign Buying worth P1,140,435.00 as of September 10, 2018.
On a 30-day trading period, MRP is on a Net Foreign Selling worth PHP25,971,261.00.
Top 10 Players’ Sentiment
Trading participants of MRP with a 100% Buying and Selling Activity as of Sep-10-2018 at 03:30 PM:
13 out of 52 participants or 25.00% of all participants registered a 100% BUYING activity
13 out of 52 participants or 25.00% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 6.9355
Top 10 Players’ Selling Average: 6.9546
The psychological average price of the top 10 players as of Sep-10-2018 is from 6.9355 to 6.9546.
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