Tuesday, March 26, 2013

stok tots: buying med anyone? 26 mar 2013)

quite strange that people all of a sudden are concerned about med's fundamentals ... they missed the whole shebang kasi 1 cent na lang par value? .. tsk tsk .. and mga beteran tsupiteros pa mandin pero takot mag trade kasi 1 cent na lang par value? wehehe

is our trading based on par value? obviously hindi .. since how come med even reached a high of 73 cents kanina .. were the people buying and selling kanina looking at par values? of course not .. they are trading using actual market prices ... in real time ...

so where is this 10k or 1k coming from (assuming you invested 100k)?

there is nothing in the disclosure about a reduction in no. of shares .. only the par value will be reduced (item no.1) .. so sino mag hair cut? not the traders kanina .. yung mag haircut .. yung mga original incorporators who contributed 1 peso per share for a total of 700 million shares .. their 1 peso is now worth .01 peso .. or 700 million divided by 100 or 7 million pesos .. which is again mentioned in no.1 of the disclosure ... i did not do the math on the deficit of med .... but the reduction in par value is supposed to do magic in the books of med .. wiping out the deficit ...

at 1 cent par value .. the med magicians will now create new 463 million x 100 shares .. or a total of 470 million capitalization:

7 million pesos (700 million shares x 01 par value) - item no.1 in the disclosure
463 million pesos (463 million shares  x 100  x 01 par value) - item no. 2 in the disclosure

= 700 million shares + 46.3 billion shares @ 01 par value
= 47 billion shares x .01 par value
= 470 million pesos new capitalization

private placement worth 117.6 million pesos ... or out of 47 billion shares ..  117.6 x 100 or 11.76 billion shares will be subscribed in pps ... .. item no. 3 in the disclosure

yan .. yan ang dilution ... from the 700 million original shares .. meron magsubscribe ng 11.76 billion shares

total shares = 700 million + 11.76 billion shares = 12.46 billion shares @ .01 par value ..

so ... assuming  all things being equal .. given the disclosure ... eventually med will be having a .58 cents x 12.46 billion shares =  7.23 billion pesos market cap .... @.58 cents closing price today

so magiging makano ang med eventually? .58 cents? .0058 cents (but x100 more shares)? wahahaha .. op kors ... the market will decide .. which will be dependent now on the new business/assets/chuvachoo to be infused by the new management .. we have a lot of previous examples ...

op kors .. i can always be wrong .. just my 1 cent par value contribution to the question of master DRAGON of finance manila

ill be glad to hear the opinions of masters mr. banker and mr. philinvestor ;)