My Dearest Moo Moo Cow,
As it is, the talk is a VGO and not a MGO. Meaning the minority investor does NOT have to sell.
But this isn't something to be brushed off lighted. Cause if enough folks sell out, then the VGO will turn into a MGO. And the outcome is not nice at all.
As it is, I for one, feel that all the minority shareholders of Maxis and all the investors of Bursa Malaysia to fight this VGO tooth and nail.
Why should the minority shareholders be the ones made scapegoats?
They say Maxis is undervalued! Well it is and this is the very reason why the investors invest in the stock. Should listed corporations be allowed to privatize based on this reasoning? Whose fault is it that their share is undervalued? Take DiGi into consideration. Their stock too was once unloved BUT the management realised this and they showed the investors the money. Yeah, show us the money. And DiGi soon became a darling investment stock! So if Maxis thinks it is undervalued and unloved then what it should do is to start thinking of ways to improve itself like increasing the dividends payout. Don't you think so my dearest Moo Moo Cow?
And Maxis is undervalued elsewhere in Indonesia and in India. Ah less we forget, the current minority shareholders had stood by Maxis and supported Maxis overseas ventures. And so far more than rm2 billion has been invested. Money which these minority shareholders were willing to forgo for the sake for a better company tomorrow. So is it ethical that Maxis turns around, after all these money has been spend to say it wants to be privatize or perhaps list in foreign companies?
And so my dearest Moo Moo Cow, why do you think folks invest in a company? Well, these folks sees a certain value in a company. And because of this perceived value, they then take the monetary risk to invest in such a company. Now if the company starts shifting the goal posts in the midst of the game by making VGOs such as this, what is the incentive left for the investor to investor to invest? And this is why investors like me is so disgusted to see issues such as this. Ask the trader, if the stock market starts shifting the goal posts by imposing last minute trade rules, would the trader be happy at all?
And without the investors, the minority shareholders in a listed company, can a stock market exist?
And what about the implications?
Let's not talk about the implications on the whole market for now but the implication on Maxis's sister companies. Given the fact it happened before with Powertek and that it also happened when the pirates siezed Bumi Armada, what would investors think of their investment in Tanjong Holdings or Astro? The risk of being privatized becomes a real investment risk that the minority shareholder cannot discount no more. And if that is the case, there is not much justifications remainding to hold on their investments in Tanjong or Astro. So would minority shareholders sell because of this risk? By the way, could the past actions on Powertek and Bumi Armada caused investors to be already weary about Maxis? And could this be a reason why Maxis is undervalued or unloved? And would todays corporate exercise caused Tanjong and Astro be unloved stocks in the future?
And what about the implications of the whole market, Bursa Malaysia? If Bursa Malaysia continues to allow companies to list and de-list anyhow and anyway they desire, then the risk of de-listing then becomes a risk for foreign investors. Where is the integrity of our stock market? Which foreign investors want to invest in our stock market then? Remember in all privatisation isssues, the minority shareholders are never given a fair chance to be adequately compensated for their risk in investing in the stock(s).
And someone once said this to me.
- That's because in deciding for privatisation, the deal hugely favours the controlling party already - hence someone must look out for the long-suffering small tenacious investor.
rgds
Recent postings.
- http://whereiszemoola.blogspot.com/2007/04/maxis-to-be-privatised.html
- http://whereiszemoola.blogspot.com/2007/04/quick-update-on-maxis.html
- http://whereiszemoola.blogspot.com/2007/04/maxis-implication.html
- http://whereiszemoola.blogspot.com/2007/04/how-much-for-maxis.html
- http://whereiszemoola.blogspot.com/2007/05/maxis-again.html
Posting on Bumi Armada
- http://whereiszemoola.blogspot.com/2006/09/pirates-which-siezed-armada.html
- http://whereiszemoola.blogspot.com/2006/09/more-on-privatisation-issue.html
Posting on Privatization issues
- http://whereiszemoola.blogspot.com/2006/08/privatisation-heathy-trend.html
- http://whereiszemoola.blogspot.com/2006/09/more-on-privatisation-issue.html
Posting on MetroJaya Privatization issue.
Posts
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