KNM: Should I Stay Or Should I Go?

Posted this morning: KNM: Do Show Us The Money!

Assume I am a shareholder, what should I do? Should I stay or should I go?

Firstly, I never under estimate the stock market and the stocks. As mentioned before, any given stocks can go up on any given day. Yeah on any other given day, they could also go down.

Yeah... I know. I am like telling everyone that chickens are one kind of birdie.

However, let's look on it from a long term perspective.

Why do I want to hold any stock? Am I wrong to believe the stock I hold have a decent chance to appreciate much higher in the future? If there is no hope, why hold the stock for the long term? Am I going to hold and hope the stock market is kind to me and someone out there, loves me too much, and would fry the stock sky high so that I can profit?

Should I have such hopes?

Or should I believe that I need to trust the owner of the company? The owners must have some sort of substance, trust worthy and needless to say someone who has the drive to take the company higher.

Now for KNM. How would I evaluate the trust issue?

Can I trust the owner?

March 2009, that's exactly one year ago, Management buyout of KNM hinges on funds. KNM then was 32.5 sen. Whatever happen to the management buyout then?

A few months earlier, KNM stock was plunging. On big volume too. That was Oct 2008.

From the posting, Regarding KNM's MD Disposal Of Shares For A Cool RM64 Million

• And did you see the point 2? Disposal of 72,271,600 shares - sold down by financier which is now resolved.And more interestingly, the company DID a share buyback during this same period! Notice of Shares Buy Back by a Company pursuant to Form 28A

How could the company be doing such aggressive share buyback when the owner's share was being forced sold? Was there a conflict of interest?

Monday, October 27, 2008 Regarding KNM's Sell Down!

• Mr. Lee has gone massive length in attempting to made a point over the size of EPF's shareholding stake and the PE yardstick but as pointed out by Naruto..
  1. What about the massive 'disposal of shares sold down by financer' on Inter Merger Sdn Bhd the other day?
  2. How's this resolved?
  3. Why did the sell down happened?
  4. And that share buyback.. the timing of the buybacks and the selldown simply arouses suspicion, yes?
  5. Shouldn't Mr. Lee directly address these issues, instead?

How?

Based on these issues, would I want to be a long term shareholder in KNM?

KN Research has a research note out on KNM today. They recommend to minority shareholders to HOLD the stock.

They say a lower offer price is HIGHLY unlikely.

• Lower offer price highly unlikely. We viewed KNM’s first offer price of 90sen as unfavourable to long term investors as it does not 1) reflect their previous earnings capacity; 2) their historical average PER trading ranges of c.15x; and 3) current global peers average FY10 PER of 15x-19x. With such reasons to prove as potential roadblocks, an even lower offer price is highly improbable.

Yeah, that's their reasoning.

Should I listen to them?

Not to say KN is wrong here but what if.....

Yeah, what if KN used the current losses of 31 million as the justification to lower their offer price. Is this NOT possible at all????

And if and when that happens, what then?

Will I, one of the minority shareholders, be justified and rewarded?

And do consider this for a moment. When the company's management first announced their management buyout plans, who exactly do they have in consideration? Are they thinking for the good of themselves or are they thinking for the good of the minority shareholders?

How? If minority shareholders, their small time business partners had not been given due consideration back then, what does the future lies for the minority shareholders?

Lastly, why so long no firm order from the KNM management? Why? Where is the moolah bro?