PhilWeb loses P5.6B of market cap as shares plummet by 43%

PhilWeb Corp. lost P5.569 billion in market capitalization, after its shares plummeted by 40 percent at the close of trading on Monday.

The listed gaming technology firm is facing the risk of shutting down, its license to operate good only until Wednesday, August 10. The situation has compelled the company to scramble for a meeting with regulator Philippine Amusement and Gaming Corporation (PAGCOR).

Shares of PhilWeb plunged to P5.13 apiece, down P3.88 or 43.06 percent from P9.01 on Friday. In the process, the company lost P5.569 billion of its market capitalization at P7.363 billion, down from P12.933 billion on Friday.

The fate of the company—whether or not it will be given the permit to operate beyond August 10—remains uncertain.

"We all know Duterte made a comment on online gaming. So this definitely spooked investors and in effect resulted in the decline of PhilWeb shares," Lexter Azurin, head of research at Unicapital Securities Inc., said.

During his administration's first Cabinet meeting on June 30, Duterte vowed to stop the proliferation of online gambling in the country.

"'Yung online gambling must stop," Duterte told his Cabinet.

"The concern right now is whether they will renew the contract of PhilWeb. The extension may lapse and there's a possibility that they may not renew the contract," Azurin said.

In a statement on Monday, PhilWeb said it has requested for a meeting with PAGCOR to clarify its predicament.

The company clarified it was not into online gambling, but was providing the technology to PAGCOR's e-Games.

"PhilWeb is merely a software provider to PAGCOR for its network of e-Games outlets. We are not online gaming. Our software cannot be played from homes or offices," PhilWeb President Dennis Valdes said in an emailed statement.

Valdes emphasized that closing down PhilWeb would result in the loss of billions of pesos in government revenue, noting it contributed P2.1 billion to PAGCOR last year and over P14 billion in the past 14 years.

In another statement over the weekend, Valdes noted that businessman Roberto V. Ongpin resigned last week as chairman and director of PhilWeb to "save the company."

Ongpin was tagged by Duterte as one of the oligarchs in the government which needed to be removed.

"Ang plano ko talaga is ... destroy the oligarchs embedded in government," Duterte said.

Ongpin's daughter, Anna Bettina Ongpin, also stepped down as vice chairperson and director of the company "... to devote more time and attention to other business matters." — VDS, GMA News