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Shares of DigiPlus [PLUS 53.00, down 7.6%; 214% avgVol], the country’s leading online gaming company, suffered an 18% drop over the last four trading sessions. PLUS closed near an all-time high on June 17 at P64.00/share, but then dropped 5.3% the next day to P60.60, then fell 0.5% to P60.30, then 4.9% to P57.35, and finally lost 7.6% to P53.00. The steep declines come after a period of intense insider selling and some major changes in leadership.
MB bottom-line: PLUS has been one of the hottest stocks on the PSE for such a long time, which is a situation that is ripe for a pullback. Truth is, you can read these tea leaves in so many different ways. The drop is evidence for those who doubt the new CEO’s ability to lead PLUS to higher highs. The drop is evidence for those who saw the recent insider sales at the P65/share level that the stock lacks the foundation to push for those higher highs. The drop is also evidence for those who have watched PLUS basically go vertical since late April that the stock is just a hype magnet that is finally buckling under the weight of its own success. Before you jump to any of those conclusions, though, want to know something interesting? PLUS’s main digital rival, Bloomberry [BLOOM 5.20, down 2.6%; 73% avgVol], is down around 10% over the same time period.
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