70% of share price lost in 4 days on threat of closure
FACING the ugly prospect of closure, listed gaming technology provider PhilWeb Corp. has seen its stocks tumble in four consecutive trading days.
The threat of shutting down started when President Rodrigo Duterte issued a statement during his first Cabinet meeting that he intended to eliminate online gambling in the country.
According to stock data from the Philippine Stock Exchange, PhilWeb shares has so far took on a 70-percent plunge from P14.18 apiece on Wednesday, August 3, to P4.25 at the close of Trading on Tuesday.
Also on August 3, President Duterte named then PhilWeb chair Roberto Ongpin as an oligarch embedded in government that must be destroyed.
The pronouncements of the president compelled Ongpin to resign as PhilWeb’s chair and director to save the company.
As soon as investors digested the information, the sell-off on Thursday began to drag PhilWeb shares to P8.95 per share at the end of the trading session. It opened at P13.20 apiece.
There was minimal movement in PhilWeb stocks on Friday, closing at P9.01 per share from P9.10 at the opening. But the shares resumed a downtrend on Monday, August 8, closing at P5.13 apiece from P7.60 at the opening.
On Tuesday, PhilWeb closed at P4.25 per share.
Over the weekend, PhilWeb clarified that Ongpin resigned with the best interest of the company and its 5,000 employees in mind, emphasizing that the company was never in the business of online gambling—that it merely provides the technology to operate e-Games outlets accredited by the gaming industry regulator Philippine Amusement Gaming Corp. (Pagcor).
Under Duterte’s orders, Pagcor revoked 124 online gaming licenses in line with the campaign against internet-based gambling.
PhilWeb secured a meeting with Pagcor Chairperson Andrea Domingo on Tuesday afternoon to clarify the issues and misconceptions about its business.
But the Pagcor chair stood on its firm ground even before the interview that PhilWeb’s license will not be renewed and is expected to expire today, August 10.
PhilWeb’s closure would mean the loss of employment for 5,000 employees, P2.1 billion in yearly Pagcor revenues, and P280 million in taxes collected by the Bureau of Internal Revenue (BIR).
Incorporated in 1957 as an industrial chemicals producer, PhilWeb was renamed and repurposed as a service provider to Pagcor for the past 14 years.
During this period, the company remitted more than P14 billion to Pagcor.