Shares & Derivatives
Heads you win. Tails I lose!!!
By Level13  •  September 8, 2009
[caption id="attachment_1725" align="alignright" width="150" caption="Photo by hillman54"]Photo by hillman54[/caption] I have to interupt the dummies posting with this latest development from one of the S-chip companies. The majority owner of China Precision has decided to take the company private by offering S$0.28 to buy back all existing shares it does not not own. I am not a stakeholder in China Precision. Nevertheless, ALL MINORITY SHAREHOLDERS SHOULD REJECT THIS OFFER! Why do I say that? Below are some reasons which i believe will support my view. 1) The company's IPO took place in May 2006 at a price of S$0.30. The exit offer is at a discount of 6.7%. This means that shareholders who held on to the shares since IPO will make a loss (lets exclude the dividends for the time being). 2) As of the latest financial report ending 30th June 2009, the net asset value (NAV) of the company is S$0.32 per share. Based on this, the exit offer is at a discount of 12.5%. Read more...
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By Level13
Level13 is a 30 yr old guy who started investing about 4 years ago. He is a value investor who tries to buy a dollar note for eighty cents or less. Level13 Investor Creed "Do not believe in anything simply because you have heard it. Do not believe in anything simply because it is spoken and rumored by many. Do not believe in anything merely on the authority of people who are above you. Do not believe in anything simply because it is found written in books. But after observation & analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it."
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