EVER-GOTESCO Resources and Holdings Inc. has lately been doing well in the market. It hit a 30-day high of P0.370 on February 27 from a low of P0.175 on January 23.
That’s more than a 100-percent jump and nobody knew anything about it. It appears the public investors are being taken for a ride here. Is it possible for a stock’s price to more than double in one month and four days, while company insiders know nothing that could influence its behavior in the market? In the first place, if a big block of shares is put up for sale, should not the regulators be informed about it?
As had happened, Ever-Gotesco is suddenly alive again. On February 26, its volume almost made it to a billion at 917.16 million shares, including a single transaction of 897 million shares. Then the following day, the stock’s volume dropped to 62.79 million shares, which was still way above its average in the last two months. The market monitor showed a low volume of only 100,000 Ever-Gotesco shares on value turnover of P20,510 on December 27, 2013. You need not wonder how Ever-Gotesco sud–denly became very much in demand among investors. Appa–rently, a single trade of 897 million shares was what made the company popular again that the Philippine Stock Exchange (PSE) had to intervene by seeking the company’s justifi–cation on its soaring share price.
The share price of Ever-Gotesco rose 48.72 percent to P0.29 from P0.19 at 11:42:28 a.m. on February 26. Since the PSE considers such price surge “unusual,” it asked the company to explain in writing how this happened to a stock that has not been performing well in the past. Christina P. Base, the company’s corporate secretary, had an answer, which as required, was notarized. “We wish to inform you that we have no knowledge of any information that caused the increase . . .”
Of course, Ever-Gotesco is not the only listed company that has been using that fill-the-blank form in responding to PSE’s inquiry on the reasons for the sudden rise or fall in the price of a particular stock. A few, if not many, have used the same “we have no knowledge” explanation, which however, would be enough to satisfy PSE’s curiosity.
Then on March 3, Base denied that Ever-Gotesco was negotiating with “any company or a group of companies to use the corporation in a backdoor listing.” She added: “Further, the corporation has also not been made aware of any plan by any company to invest in the corporation.”
Suddenly, a disclosure that was posted on March 5 on the PSE website said it all. Entitled “initial statement of beneficial ownership of securities,” it was filed by Consolidated Ventures Inc. to inform the public of its ownership of 897 million Ever-Gotesco shares, which represent 18 percent of outstanding. A follow-up posting on the same day reported the acquisition by Consolidated on February 26 of 897 million Ever shares at P0.195.
This series of events eventually led to the truth that there was something happening to Ever-Gotesco which company insiders knew nothing about.
Neither did they acknowledge any hint about Con-solidated’s significant acquisition. Is it possible that no one in the Go family knew anything about Consolidated? The Gos are Ever-Gotesco’s majority stockholders thru Gotesco Properties Inc., which holds 2.66 billion Ever-Gotesco shares, or 53.32 percent.
As in the past, both PSE and the Securities and Exchange Commission (SEC) have not changed the market rules on disclosing significant acquisition of shares in listed companies. They are interested only in the buyers but not in the sellers. Really?
Meanwhile, let the public investors guess who sold 897 million Ever-Gotesco shares to Consolidated. They can’t hope to get any information from the SEC and PSE officials who should be reminded that a stock’s price surge becomes “unusual” only when disclosures, as usual, remain incomplete.
PERSONAL NOTE. I wish to thank the personnel of the satellite office of the Land Transportation Office at Robinsons Mall in Santa Rosa City for their efficient service. They live up to their promise to finish processing a drivers’ license renewal in 30 minutes. Of course, they lied. I got my new license in less than the allocated time.