03-12-2022, 10:44 PM
(16-11-2022, 01:30 PM)CY09 Wrote: [ -> ]Yes, those who had "weak hands" or mention (was in their telegram chat) it was more worth while to accept the offer and rotate out to US/China Tech in Jan 2022, on hindsight, would have regretted it.
As OPMI, we are at the mercy of the controlling shareholders. OPMIs could have banded together and mount a challenge against the controlling shareholders. However as seen in the Best World Telegram chat and Sembcorp Marine rally against the merger, it is a big hurdle to unify a large enough pool of OPMI. If we are to take reference to Malaysia politics, it was like how Anwar, Mahatair and a few others banded together against UMNO but then halfway through, the sheraton movement occurred which resulted in the alliance breaking apart.
The moment a few OPMIs are swayed, OPMIs will lose an upper hand against the controlling shareholder even before being able to mount a challenge
In BW's case, what puzzled me most was the lack of active involvement by the Top XX retail shareholders. Given the amount at stake (millions of dollars), I would have thought there could be something more prominent along the lines of votenoformerger (SCM), as those most financially affected fight for their interests.
It has been some 3 wks since the trading resumption, and thankfully, it was largely uneventful - no new short reports, trading halt, etc *touch wood*. I would think the independent reviews, audits, etc over the recent years have addressed the claims by the short sellers.
However, based on the financial ratios of BW, it has been/is trading at very attractive levels since resumption. Why ? Is it because investors are still apprehensive ? Is it because the $1.36 EAO hasn't gone down well with shareholders given the current share price upon resumption ?
Nevertheless, this episode has made me wonder whether simplistically speaking, value investing in OPMI context, is merely a game of chance betting on the "reaction" of the mkt participants where deeper knowledge just serves to give better odds. In BW's case*, OPMI investing in BW at current valuation is probably betting that BW will trade back at historical valuations. OPMI do not get to make capital allocation decisions - dividend payout ratio, etc., to affect the share price positively. To fully participate in BW's growth and realize the intrinsic value of BW, it is a different story altogether - one has to buy the entire business at an undervalued price.
*emerge from long suspension, challenging prospects as described in BW results statement
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What Is Value Investing?
Value investing is an investment strategy that involves picking stocks that appear to be trading for less than their intrinsic or book value. Value investors actively ferret out stocks they think the stock market is underestimating. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond to a company's long-term fundamentals. The overreaction offers an opportunity to profit by buying stocks at discounted prices—on sale......
Market Moves and Herd Mentality
Sometimes people invest irrationally based on psychological biases rather than market fundamentals......
https://www.investopedia.com/terms/v/val...-investing (emphasis added)