Olam Stock Take on Blog

By K.I.S.S. Investing • January 15, 2013

Recently, i done a Facebook Q&A to see what are the companies my readers are interested in. And Olam comes out as quite a hot favourite.

I shall touch on Olam now (sorry for the delay! Busy with some stuff recently...)

Fundamental:

Everyone should have known about the big impact of the Block's damaging report from Muddy Waters which led to a stock fall of nearly 20%, adding to the woes of a bad commodity cycle.

As for the recovery, Olam is issuing a big sum, US$750m, of 5 year Bonds which comes with "free" warrants.. trying to boost its war-chest. The cost of this debt is a whooping 13.7% according to the article by Michael Dee, saying that it sorts of instills the notion that what Brook was correct in saying that Olam is cash-poor and debt-intensive.

If you wish to read the entire report, Like ......