Globe 'very optimistic' the PSE will cave on float issue

According to a report on a recent Globe [GLO 2270.00, down 0.8%] earnings call [link], GLO’s CEO Ernest Cu is bullish on the PSE and SEC caving into GLO’s request for an exemption from the PSE’s 20% public float requirement for GLO’s upcoming GCash IPO. According to Mr. Cu, “we [GLO] remain very optimistic that the PSE, the SEC will [...] see things our way in terms of the need to look at this [minimum public ownership] threshold that has been around for quite some time.” He supported his argument to allow GCash to list with a smaller public float by pointing out the rule is “quite rigid”, the rule has been around for a long time, the market is not that healthy, and the GCash offering is quite large. GCash is valued at approximately $5 billion (~P290 billion) based on its most recent fundraising round, but hopes to IPO at a valuation close to $8 billion (~P465 billion) which would make listing 20% of its shares an IPO that would be the largest in PSE history at around P93 billion. 

MB bottom-line: The problem is price. Every institutional and retail trader in the world has wanted a piece of this pie for literal years, but Mr. Cu and the Zobel Family have slow-walked this thing to market using an extended series of fundraising rounds to ratchet up the valuation. I’m not saying that this has been a bad strategy. On the contrary, they’ve grown GCash into the “It Girl” of SE Asian startups, and have made something that could IPO with a marketcap greater than that of its parent company, GLO, and bigger than some bedrock financial firms like Metrobank and Chinabank. But all of these fears about the IPO being too big for the PSE to absorb are actually fears about the market’s opinion of their own valuation. Price solves everything. If GLO was signaling a GCash listing with lots of upside, institutional investors from around the world would be calling to get a piece of the action. They could probably sell a 20% stake right now if they reduced the price. So the problem isn’t the PSE, or the float, or us as investors. The problem is the price. Lower the price, sell the shares. I think what everyone wants to avoid is another behemoth coming to market, like Monde Nissin [MONDE 7.57, down 0.4] did back in 2021, only for that behemoth to drop like a rock, like MONDE has, down 44% from its IPO. The price matters. The minimum public ownership rule matters. 

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