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ISLAND
Information and Technology Inc. (IS) and Multitech
Investments Corp. (MIC) have something in common that
would not qualify them for inclusion in the portfolio of
long-term investors who are in the stock market for
dividends, either in cash or in stocks.
The two
stocks have been incurring losses over the years.
Despite this unprofitability, IS made it to the list of
top gainers from August 13-17, 2007; MIC was the week’s
biggest loser. See Market Watch below.
As of
April 30, 2007, IS had an accumulated deficit of
P100,655,694.63, while MIC had piled up P179,152,379 in
losses as of June 30, 2007.
Despite
their poor financial performance, IS and MIC climbed
when the market’s main index was on a bull run but
slowly declined as the bears haunted the market. Their
slow fall was their way of disgorging their previous
gains.
As among
last week’s biggest gainers, IS closed at P0.16, which,
incidentally, was the company’s closing price on July
19, 2007 but which was a huge plunge from a 30-day high
of P0.32 on July 13, 2007. IS recorded its 30-day low of
P0.105 on August 6, 2007.
Broker
control
A filing
lists PCD Nominee Corp. as the record stockholder of
162,639,094 MIC shares, or 90.355 percent, with Filipino
investors as beneficial owners, whose holdings are held
by their respective brokers.
The
definitive information statement submitted by MIC to
regulators in connection with the company’s annual
stockholders’ meeting listed Angping & Associates and
Meridian Securities as the biggest record stockholders
with 36,581,200 shares, or 20.32 percent and 11,576,700
shares, or 6.43 percent, respectively.
On July
9, 2007, MIC opened at P9.10, peaked at P9.40, plunged
to P8.80 and closed at P8.90. This was remarkable for a
company that reported a net income of only P389 in the
first six months of 2007, down from P423 in the same
period last year.
As a
holding company, MIC has made only one investment that
went sour. In 1999, it bought 6,820,737 shares in BW
Resources Corp. (BWRC), paying P28 per share for total
acquisition cost of P190,980,636. Its disclosure did not
say from whom it bought the BWRC shares.
As of
end-2007, MIC still owned 350,737 BWRC shares. It did
not disclose at what price it sold most of its BWRC
shares. It keeps losing from its BWRC investments. On
August 17, 2007, Suntrust Home Developers Inc., the new
corporate name of BWRC, closed at P0.47, a huge drop of
P27.53 from MIC’s acquisition price of P28 per share in
1999.
BWRC was
not its only big disappointment in 1999. In the same
year, its stockholders ratified the increase in its
authorized capital to P740 million from P240 million.
The P500-million additional capital was intended to
accommodate a new investor, which MIC did not name.
With the
unidentified investor backing out, MIC said its capital
remains at P240 million as it has also rescinded the
subscription of businessman Dante Tan to 60 million
shares of the aborted capital increase. Tan, a former
BWRC majority owner, was among those implicated by the
Securities and Exchange Commission in the alleged price
manipulation in the trading of BWRC shares. |
