Wednesday, December 21, 2005

Move Over Who?: Part VI

Could i end the story at Part V?

No way Jose. We only started!

So what about Karensoft management? The stock is being sold down and all kind of market tok is flying all over all the place.

So on the 7th April, Karensoft nicely had an article in the Star Biz:
KarenSoft CEO quashes talk of directors leaving

The article was full of questionable issues!

Besides panic selling by shareholders and the sale of shares by Chee himself, he said the bearish market compounded the problem.

LOL! He himself sold shares. If the boss sells by the truck loads, how and what kind of impressions will others have on the share? Why doesn't he admit that his shares were FORCE-SOLD in the market? Blaming the bearish market? Omigod! Gee! And if me Ah Poh read this, she would probably gave him a good rollicking!

Let's give the whole series of events a thought or two..

1) they announce their big software package,

2) then Kenanga gave it a huge write-up, and of course basing everything on the expected/estimated sales of this software package (now if software fails to deliver, Karensoft at 0.96 was sold to the investing public based on a sky high pe valuations of 81x!).

3) A private placement had to be postponed... (ahh depends on how u read it.. what if no funds in believe in this software package? Placement buyers are investors too mah... if cannot make money or chances are slim to make money, u think they want ka?)

4) Share has been falling steadily all this while..

5) Announcements were made showing that ze bossie's shares were being forced sold!

6) A lame article comes out in Star on that day...

7) From 0.96 to 0.255...WOW!!

And it just doesn't end here. A couple of days later, news came out that Karensoft's placement shares were placed out at a price of 28 sen.

KARENSOFT TECHNOLOGY BHD has fixed the issue price of the final tranche of the new 6.25 million 10 sen shares for private placement at 28 sen per share.

AmMerchant Bank Bhd in a statement on behalf of Karensoft said the issue price of 28 sen per share was based on the five days' weighted average market price of Karensoft's shares from April 4 to 8, 2005.

Naturally, there were a lot of unhappy folks. Some felt that these actions were unjust.

Some even brought out the issue that the placement price is too low compared to Karensoft's IPO price.

And the Edge Weekly promptly had a write-up on this isse on the 19th April 2005:
Corporate: KarenSoft's rationale for share placement

Fair or unfair, somehow i felt that from day one, investors should have had known what they were investing in. As mentioned earlier, Karensoft had basically nothing except a potential winner in their software suite. However, sadly, they should have realised that one rule of thumb, potential prospect simply does not equate to profits. And if they had invested in Karensoft, they should have realised that they are merely speculating on Karensoft based on this factor.

And when you speculate, you should realise the risk involved.

And most important, acknowledge the mistakes if and when we are wrong.

To buy and hold such investment is one reason why the buy and hold fails one time too many!

Don't you think so?

Oh.... it does not even end here!!!

to be continued..... Part VII!!!

Quick ref:

Move Over Who?
Move Over Who?: Part II
Move Over Who?: Part III
Move Over Who?: Part IV
Move Over Who?: Part V