ENFA
890 5th Avenue Partners, Inc. Class A Common Stock
stock NASDAQ

#Happy Friday, Barkada --
#The PSE gained 5 points to 6331 ▲0.1%
Thank you to all the readers who wrote in privately to give positive feedback on the short-notice Q&A/AMA that I did yesterday.
The big takeaway: readers want more Q&A-type content, and I'm happy to provide!
I'll send out a survey link on Monday and we'll do it again soon.
#▌[In today's MB](https://mailchi.mp/merkadobarkada/digiplus-prez-exercises-option-for-p12-b-worth-of-shares):
- **SPNEC confirms second exchangeable note**
- P6.28 billion loan to Leandro Leviste
- MGen can demand repayment in SPENC shares
- **DigiPlus President exercises option of 21.7-M shares**
- Paid P2.68/share for stake worth P1.2-B
- PH unfamiliar with huge paydays like this
- **PBCOM pays 1st dividend in its history**
- P1.00/share "special" dividend
- Mixed signals all over the place
#▌[Daily meme](https://i.imgur.com/z8F7nNb.png) | [Subscribe (it's free)](https://mailchimp.us12.list-manage.com/subscribe?u=925d69480ecfc297864a79dc6&id=17742706f1&utm_source=mb) | [Today's email](https://mailchi.mp/merkadobarkada/digiplus-prez-exercises-option-for-p12-b-worth-of-shares)
#▌Main stories covered:
>- **[NEWS] SPNEC confirms ₱6.28 billion “exchangeable note” agreement with Leandro Leviste...** **SP New Energy** [SPNEC 1.22 ▲0.8%; 199% avgVol] [[link](https://edge.pse.com.ph/openDiscViewer.do?edge_no=360b57fc06069dc5ec6e1601ccee8f59)] confirmed a report that **MGen**, a subsidiary of SPNEC’s parent company, **Meralco** [MER 547.00 ▲0.4%; 18% avgVol], had entered into what it calls an “Exchangeable Note Facility Agreement” (ENFA) with **Leandro Leviste’s Solar Philippines Power Project Holdings, Inc**.(S3PHI). Under the terms of the ENFA, MGen will loan S3PHI ₱6.28 billion, and MGen will have the option to have the loan repaid in cash or in 5.01 billion shares of SPNEC. If MGen elects to be repaid in SPNEC shares, S3PHI will transfer the shares to MGen on September 2 of this year.
> - ***MB:*** Hat tip to Leandro Leviste. I basically hated everything he did with the company that he brought to the PSE just a little over three years ago, but it’s hard to argue with his results. I mean, sure, plenty of retail SPNEC traders are still underwater on shares they bought during the hype storm in the early years, but when this is all said and done, Mr. Leviste is going to walk away from this clown show of a company with around ₱34 billion in proceeds from the sale of his shares to companies controlled by **Manny Pangilinan**.
>- **[NEWS] DigiPlus President exercises option on over 21.7 million shares...** **DigiPlus** [PLUS 58.10 ▲3.6%; 75% avgVol] [[link](https://edge.pse.com.ph/openDiscViewer.do?edge_no=c29f630f51167e26ec6e1601ccee8f59)] disclosed that its President, **Tsui Kin Ming** (TKM), exercised his employee stock option plan (ESOP) to purchase 21,758,202 PLUS shares for ₱2.68/share, for a total purchase price of ₱58.3 million. At the time of TKM’s purchase, the market price of PLUS’s shares was ₱54.85, making TKM’s stock purchase worth ₱1.2 billion at open market price levels.
> - ***MB:*** This kind of ESOP payday is uncommon for companies on the PSE. American CEOs have been doing this for decades, but it’s not as accepted here for reasons that are sometimes hard to pin down. Does TKM deserve to buy ₱1.2 billion worth of stock for just ₱58 million? Does he deserve to reap over ₱1.1 billion in “free” value just for being the President of the company? What is the right compensation for a guy who will be in charge of the hottest company on the PSE? When the board of directors approved PLUS’s ESOP plan back in January 2023, PLUS was trading right around the strike price for the option. As a shareholder, I don’t know that I would credit PLUS’s 1977% rise over that time period solely to TKM, but I’m also willing to entertain the thought that PLUS’s success and stock price rise was not automatic, and that if a good amount of that rise was due to TKM’s work, then the gamble that he took in accepting the ESOP as part of his compensation was profitable for both TKM and the shareholders that approved the plan.
>- **[DIVS] Philippine Bank of Communications pays first dividend in its history...** The board of directors of the **Philippine Bank of Communications** [PBC 17.48 ▲4.7%; 904% avgVol] [[link](https://edge.pse.com.ph/openDiscViewer.do?edge_no=e63f3bd98a049105ec6e1601ccee8f59)] declared the bank’s first ever dividend, payable on July 31 to shareholders of record as of July 9. The ₱1.00/share special cash dividend is coming out of PBCOM’s FY24 unrestricted retained earnings. In a statement, PBCOM said that the only other dividend that it has declared was a property dividend back in 1997, so this cash dividend “clearly demonstrate[s] the substantial improvement in the Bank’s financial standing over the past 27 years.” PBCOM was acquired by **Lucio Co** in 2014, and has had a universal banking license since 2022.
> - ***MB:*** The special cash dividend comes after three high-profile officers tendered their resignations from the Co Family’s bank, including Erico Indita (the former Executive Vice President and Head of Branch Banking Group), Ronald Paul San Diego (First Vice President and Enterprise Risk Management Group Head), and Dreda Teresa Mendoza (Trust and Wealth Management Group Head). All of the resignations were listed as for “personal reasons”. Putting that stuff aside, it’s pretty weird for the bank to tout declaring one cash dividend in 27 years as evidence of some major turnaround. The dividend was categorized as a “special” dividend, which implies that the board doesn’t want shareholders to expect something similar next year. Mixed signals all over the place.
**MB** is written and distributed every trading day. The newsletter is 100% free and I never upsell you to some "iNnEr cIrClE" of paid-membership perks. Everyone gets the same! Join the barkada by signing up for the [newsletter](https://mailchimp.us12.list-manage.com/subscribe?u=925d69480ecfc297864a79dc6&id=17742706f1&utm_source=mb), or follow me on [Twitter](https://twitter.com/MerkadoBarkada). You can also read my daily Morning Halo-halo content on [Philstar.com](https://www.philstar.com) in the [Stock Commentary](https://www.philstar.com/business/stock-commentary) section.
#Subscribe [here](https://mailchimp.us12.list-manage.com/subscribe?u=925d69480ecfc297864a79dc6&id=17742706f1)
#Read today's full newsletter [here](https://mailchi.mp/merkadobarkada/digiplus-prez-exercises-option-for-p12-b-worth-of-shares)

#Happy Friday, Barkada --
#The PSE gained 5 points to 6331 ▲0.1%
Thank you to all the readers who wrote in privately to give positive feedback on the short-notice Q&A/AMA that I did yesterday.
The big takeaway: readers want more Q&A-type content, and I'm happy to provide!
I'll send out a survey link on Monday and we'll do it again soon.
#▌[In today's MB](https://mailchi.mp/merkadobarkada/digiplus-prez-exercises-option-for-p12-b-worth-of-shares):
- **SPNEC confirms second exchangeable note**
- P6.28 billion loan to Leandro Leviste
- MGen can demand repayment in SPENC shares
- **DigiPlus President exercises option of 21.7-M shares**
- Paid P2.68/share for stake worth P1.2-B
- PH unfamiliar with huge paydays like this
- **PBCOM pays 1st dividend in its history**
- P1.00/share "special" dividend
- Mixed signals all over the place
#▌[Daily meme](https://i.imgur.com/z8F7nNb.png) | [Subscribe (it's free)](https://mailchimp.us12.list-manage.com/subscribe?u=925d69480ecfc297864a79dc6&id=17742706f1&utm_source=mb) | [Today's email](https://mailchi.mp/merkadobarkada/digiplus-prez-exercises-option-for-p12-b-worth-of-shares)
#▌Main stories covered:
>- **[NEWS] SPNEC confirms ₱6.28 billion “exchangeable note” agreement with Leandro Leviste...** **SP New Energy** [SPNEC 1.22 ▲0.8%; 199% avgVol] [[link](https://edge.pse.com.ph/openDiscViewer.do?edge_no=360b57fc06069dc5ec6e1601ccee8f59)] confirmed a report that **MGen**, a subsidiary of SPNEC’s parent company, **Meralco** [MER 547.00 ▲0.4%; 18% avgVol], had entered into what it calls an “Exchangeable Note Facility Agreement” (ENFA) with **Leandro Leviste’s Solar Philippines Power Project Holdings, Inc**.(S3PHI). Under the terms of the ENFA, MGen will loan S3PHI ₱6.28 billion, and MGen will have the option to have the loan repaid in cash or in 5.01 billion shares of SPNEC. If MGen elects to be repaid in SPNEC shares, S3PHI will transfer the shares to MGen on September 2 of this year.
> - ***MB:*** Hat tip to Leandro Leviste. I basically hated everything he did with the company that he brought to the PSE just a little over three years ago, but it’s hard to argue with his results. I mean, sure, plenty of retail SPNEC traders are still underwater on shares they bought during the hype storm in the early years, but when this is all said and done, Mr. Leviste is going to walk away from this clown show of a company with around ₱34 billion in proceeds from the sale of his shares to companies controlled by **Manny Pangilinan**.
>- **[NEWS] DigiPlus President exercises option on over 21.7 million shares...** **DigiPlus** [PLUS 58.10 ▲3.6%; 75% avgVol] [[link](https://edge.pse.com.ph/openDiscViewer.do?edge_no=c29f630f51167e26ec6e1601ccee8f59)] disclosed that its President, **Tsui Kin Ming** (TKM), exercised his employee stock option plan (ESOP) to purchase 21,758,202 PLUS shares for ₱2.68/share, for a total purchase price of ₱58.3 million. At the time of TKM’s purchase, the market price of PLUS’s shares was ₱54.85, making TKM’s stock purchase worth ₱1.2 billion at open market price levels.
> - ***MB:*** This kind of ESOP payday is uncommon for companies on the PSE. American CEOs have been doing this for decades, but it’s not as accepted here for reasons that are sometimes hard to pin down. Does TKM deserve to buy ₱1.2 billion worth of stock for just ₱58 million? Does he deserve to reap over ₱1.1 billion in “free” value just for being the President of the company? What is the right compensation for a guy who will be in charge of the hottest company on the PSE? When the board of directors approved PLUS’s ESOP plan back in January 2023, PLUS was trading right around the strike price for the option. As a shareholder, I don’t know that I would credit PLUS’s 1977% rise over that time period solely to TKM, but I’m also willing to entertain the thought that PLUS’s success and stock price rise was not automatic, and that if a good amount of that rise was due to TKM’s work, then the gamble that he took in accepting the ESOP as part of his compensation was profitable for both TKM and the shareholders that approved the plan.
>- **[DIVS] Philippine Bank of Communications pays first dividend in its history...** The board of directors of the **Philippine Bank of Communications** [PBC 17.48 ▲4.7%; 904% avgVol] [[link](https://edge.pse.com.ph/openDiscViewer.do?edge_no=e63f3bd98a049105ec6e1601ccee8f59)] declared the bank’s first ever dividend, payable on July 31 to shareholders of record as of July 9. The ₱1.00/share special cash dividend is coming out of PBCOM’s FY24 unrestricted retained earnings. In a statement, PBCOM said that the only other dividend that it has declared was a property dividend back in 1997, so this cash dividend “clearly demonstrate[s] the substantial improvement in the Bank’s financial standing over the past 27 years.” PBCOM was acquired by **Lucio Co** in 2014, and has had a universal banking license since 2022.
> - ***MB:*** The special cash dividend comes after three high-profile officers tendered their resignations from the Co Family’s bank, including Erico Indita (the former Executive Vice President and Head of Branch Banking Group), Ronald Paul San Diego (First Vice President and Enterprise Risk Management Group Head), and Dreda Teresa Mendoza (Trust and Wealth Management Group Head). All of the resignations were listed as for “personal reasons”. Putting that stuff aside, it’s pretty weird for the bank to tout declaring one cash dividend in 27 years as evidence of some major turnaround. The dividend was categorized as a “special” dividend, which implies that the board doesn’t want shareholders to expect something similar next year. Mixed signals all over the place.
**MB** is written and distributed every trading day. The newsletter is 100% free and I never upsell you to some "iNnEr cIrClE" of paid-membership perks. Everyone gets the same! Join the barkada by signing up for the [newsletter](https://mailchimp.us12.list-manage.com/subscribe?u=925d69480ecfc297864a79dc6&id=17742706f1&utm_source=mb), or follow me on [Twitter](https://twitter.com/MerkadoBarkada). You can also read my daily Morning Halo-halo content on [Philstar.com](https://www.philstar.com) in the [Stock Commentary](https://www.philstar.com/business/stock-commentary) section.
#Subscribe [here](https://mailchimp.us12.list-manage.com/subscribe?u=925d69480ecfc297864a79dc6&id=17742706f1)
#Read today's full newsletter [here](https://mailchi.mp/merkadobarkada/digiplus-prez-exercises-option-for-p12-b-worth-of-shares)