Cirtek calls for voluntary suspension of TECHW before delisting

Cirtek (TECH 1.68, up 5.7%; 248% average volume) (shortcut) called on the PSE to Detachable bonus warrants (TECHW 0.08, up 85.7%; 630% average volume) on August 13. Holders of TECHW shares have until August 16 to exercise their options before the warrants are automatically delisted on August 19. Any unexercised warrants will expire if not exercised before the end of the exercise period on August 16.

MB conclusion: The TECHW warrants gave holders the right to convert each TECHW share into one TECH share at an exercise price of P5.50/share. When these warrants were sold in 2021, the price of TECH was in the range of P6.00 to P6.40, so the right to convert one TECHW share into one TECH share for only P5.50 had value. Unfortunately for TECHW buyers, TECH’s share price was never higher than the day the prospectus for the TECHW shares was released. TECH was at ~P3.80/share at the end of FY2021, ~P2.95 at the end of FY2022, ~P1.60 at the end of FY2023, and is currently floating sideways at P1.68/share. The warrants were a fantastic deal for TECH owner Jerry Liu, who was able to use the bonus warrants (and some superficial press releases about a possible U.S. listing of TECH) as an incentive to entice more buyers to purchase shares in the rights offering that netted the company P1.3 billion. TECHW entered the stock market in 2021 at P1.36/share, but closed yesterday at P0.078/share.

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