I think people realise Olam has a solvency issue but forgot a crucial difference: though ROIC is the same but the liquidity profile of an asset heavy business model and one WC heavy is very different.
What it means is that if the figures are "real", Olam could scale back on their business and generate cash flows or her liabilities. It will definitely affect the business but can easily restore confidence first before moving on, unlike selling assets which may have a longer term strategic impact.
Obviously that doesn't solve the issue that olam is over leveraged and creditor confidence is hence important, but cash flow management is not as dire as some thinks. This rights issue is likely to address the former
I will go long today.if muddy water have not cut the short position recently they will be squeeze out. Soon
Throughout this saga, olam has been using Temasek like a body shield. The rights (bonds with warrants) issue is no exception. To many, the name Temasek sounds formidable and everything they touch seems to turn into gold.
However, investing is never infallible and for those who are unsure what i am talking about can just type 'ABC Learning Australia Temasek' into your search engine.
And suddenly i started seeing nice feel good sentiments about Olam and proposal to gg long when few days ago it was directly reverse.
Thats why sticking to value investing criterias are important, and thats why I am still learning everday.
A counter of highly leverage debt coupled with decreasing CFO shouldnt even be in a value investor screen.
Anyway not to poke fun at anyone but honestly even I scumbur to greed at times and got into losses.
Olam is paying Temasek a lot for its support. Don't overestimate Olam and don't underestimate Temasek.
Temasek up their stake, people kpkb.
Temasek cut loss, people kpkb.
Temasek remain status quo, people kpkb.
Ha... So how?
Temasek need a vested interest in Olam, our country grows nothing...
Personally, I couldn't care less what Temasek does, cos I know they have ultra-deep pockets.
For me, when I look at -ve FCF, razor-thin margin, high gearing and other such red flags, it simply tells me to "avoid".
And oh yes, one more thing, I don't understand their business!
(04-12-2012, 09:21 AM)WolfT Wrote: [ -> ]Temasek up their stake, people kpkb.
Temasek cut loss, people kpkb.
Temasek remain status quo, people kpkb.
Ha... So how?
Temasek need a vested interest in Olam, our country grows nothing...
haha, sometimes people just wanna find excuses to kpkb
(04-12-2012, 09:35 AM)money Wrote: [ -> ] (04-12-2012, 09:21 AM)WolfT Wrote: [ -> ]Temasek up their stake, people kpkb.
Temasek cut loss, people kpkb.
Temasek remain status quo, people kpkb.
Ha... So how?
Temasek need a vested interest in Olam, our country grows nothing...
haha, sometimes people just wanna find excuses to kpkb
The problem is people think Temasek money->Ah Gong money->taxpayer money ->
singaporean money->my money.
Thought the CEO said few days ago, that Olam didn't need to raise money within 5 months ?