In a disclosure to PSE dated July 31, 2012 Tanduay Holdings, Inc. announced that it would be the consolidation vehicle of Lucio Tan's other business interests. TDY will be renamed LT Group, Inc. and will hold controlling interests in:
a. Asia Brewery, Inc.
b. Fortune Tobacco Corporation
c. Eton Properties Philippines, Inc.
d. Philippine Airlines, Inc.
e. Air Philippines Corporation
The restructured company would also have investments in:
a. Philippine National Bank
b. Allied Bank
A day before the announcement, TDY stock price was trading at P 5.10 per share. A day after it resumed from a voluntary trading halt the shares jumped at 7.65, the increase hampered only by the 50% limit set by the stock exchange. The next day, the stock continued to surge and close at the set limit, P11.46 per share. It reached an all time high at P 12.98 last Wednesday.
TDY share price - 1 month
From July 24 when the stock was at P 4.50 to its close yesterday, Aug. 10 at P 11.90 the stock price has increased by 164%. The extraordinary stock movement is a prime example of how investors look at their investments through its perceived value. While it is still difficult to quantify if the increase is reasonable because of uncertainty of how much interests the company will hold, the hype is fairly explainable. Lucio Tan is the second richest Filipino per Forbes' list and having a chance to invest in his holdings offer diversification to different sectors.
I personally suggest to take some profit while the stock is still hot. Keep yourself updated because a lot of things happen in a day. For investors, it is important to take more caution specially when emotions trump actual data. In the end only time will tell if LT Group can live up to the hype.
Disclaimer: This article is solely the opinion of the blogger based on personal research. Any statement made is not a conclusion of absolute fact and is not intended to impose or persuade anyone's judgement.