At first IPO of this great business model, I was excited. Finally, a Walmart - like business in the Philippines. Affordable retail and it might conquer the Philippines like that of Walmart. I bought as much as I can in this IPO and I just sold all of them a few weeks back. I made a hefty amount of profit but I am very disappointed that I have to sell. Here's the reason why...
When I bought into Puregold, the goal for me is to hold on to it forever. Judging by what Wamart accomplished, I see myself having a comfortable retirement just with this company. It did what Walmart did... Until now. Walmart is owned by a close knit family with a frugal tradition and will never do anything stupid for the business and that in turn will also translate to a positive shareholder / investor value. They will never pay themselves ridiculous amounts of bonuses. And that is where Puregold I think messed up.
I could forgive that Puregold expanded very rapidly, taking advantage of low interest rates, taking loans everywhere, building expansions, acquiring... I can forgive all that, although that alone is a red sign for me. You can not expand too fast or borrow money too fast. But the last draw was that, they decided to pay the managers large sums of money, devaluing shareholder's investments. That's the last draw. I'll take my money elsewhere. Too bad Puregold... You might go up once I sold. And that's good. I'm happy for you. But I can't trust you with your managers sucking all the money. I can't trust you now as a business partner.
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