Airtel Malawi is a leading mobile telecommunications company which aims to connect millions of Malawians to the world. On the 27th December 2019, this corporate giant made a historic move by declaring that 2.2 billion shares were on sale and encouraged Malawians to buy in as shareholders.
The shares served as an indication that Malawians will have fractional legal control of the company. So, if a person buys shares in Airtel Malawi, they become part of the proprietors.
Airtel Malawi was selling 2.2 billion shares (20% of its shares) to Malawians at a price of k12.69 per share.
This corporate made a decision to put out its Initial Public Offering which is basically when a company publicly sales its shares on the open market. For a corporation that’s looking to further the expansion of its company, an IPO as the simplest way to come up with the capital needed to extend its scope of operations.
In most cases this capital is used to research and fund new ideas, fund capital payment, or perhaps used to pay off existing debt. To some Malawians this new development was viewed as a deception to steal people’s money. Others, viewed it as a move Airtel made because it was not making profits and was in serious debt. This led to a lot of controversy surrounding the Airtel Malawi shares subject on social media platforms. While some deemed the investment as risky, others saw an opportunity and jumped to it.
One positive about Airtel Malawi’s move is that it gave rise to public interest by making it’s products known to a brand-new group of potential customers. Airtel Malawi became the talk of the town. Accordingly, this might result to an increase in the corporate’s market share. Moreover, some Malawians who invested or bought shares now feel attached to the company because of their investments. So, in a sense, this move has boosted the companies brand loyalty.
The controversy surrounding Airtel Malawi’s decision showed that most Malawians were not really aware of what exactly this shares saga was all about. It came at a time when the term investment is like music to the ears of some but they don’t have the background knowledge to make smart financial decisions. What made matters worse, was the conflicting advice from specialists in this field. People didn’t know who to believe, and who to trust.
While others wanted to see the short-term benefits of their investment, some were in it for the long run. They carefully analyzed Airtel Malawi’s prelisting statement which included its income statement for the last 3 years and made a decision on whether to opt in or opt out of the shares.
It’s interesting to note that despite the controversy surrounding the shares, Airtel Malawi was able to exceed its target. It set out to sell 2,200,000,000 shares however 2,207,272,446 shares were bought. Does this mean that people saw it as a risk worth taking? Possibly. But we cannot know for sure how confident everyone who made the decision to opt in was. Maybe some were just curious? But one thing we know for sure is that it’s too soon to draw conclusions about the Airtel saga. In other words, just because the offer has ended, the saga continues. And only time will tell whether the naysayers were right or very very wrong.