Businessman Lester Yu’s latest gimmick to spark interest in his Fruitas Holdings (FRUIT) stock has exploded in his face.
In a facepalm moment, Yu admitted that buying out a little-known clinic owned by the mother of FRUIT CFO and treasurer Juneil DominicP. Torio was a bad idea nearly two weeks after claiming he was “extremely excited” over entering the health care business.
Defensive! Lester Yu justifies Fruitas’ purchase of obscure health clinic owned by CFO’s mom
Yu even justified just a few days ago by claiming it would provide additional income to FRUIT with minimal impact on its cash flow.
Apparently, FRUIT shareholders were unhappy over Yu’s decision to invest the remaining proceeds of its initial public offering in 2019 outside its core business, food service.
In a disclosure on November 19, FRUIT said it has terminated its negotiations with Torio’s mother for the purchase of Surehealth Multi-Specialty & Diagnostic Clinic and its single clinic in Sta. Mesa, Manila.
“ Management recognized concerns that this may become a distraction from pursuing opportunities in its core food and beverage retail business. With the decision to terminate discussions to acquire Surehealth Clinic, management is reinforcing its commitment to focus resources to take advantage of the expected recovery and harnessing the significant growth potential of its foodservice business,” said FRUIT.
“In particular, it will continue to enhance the accessibility of its products, both through physical and digital channels. It will also carry on the expansion of its community store network, with emphasis on Balai Pandesal which it recently acquired,” FRUIT said.
FRUIT has fallen nine percent to P1.24 since Yu announced his plan to acquire a clinic.
The company has lost a total of P64M million from 2020 to the first three months of 2021. As of the first half, FRUIT had spent 88 percent of the P897 million it raised from its IPO in November 2019.