M1: Pre-Conditional Voluntary GO at $2.06
|image credit to straitstimes.com|
If there's one issue dominating the business headlines these days, it's definitely the "
Keppel and SPHto buy rest of M1; Keppel to privatise Keppel T&T ". ( from The Business Times)
Depending on what was your entry price and average cost, some may make money at this offer price and some may still lose money. I am the one belongs to the second group as my average cost is well above $2.06. This is a typical “Buy High Sell Low “ case as I have decided to sell some at around $1.53- $1.59, 2 weeks ago. By hindsight, I should have keeping these stocks or buy some more to average down my cost … hahaha .
My XIRR after almost 4 years of holding M1 if I would have to accept their offer at this price will be -4.5 % with total loss including a dividend of -$13,797,a painful and lousy investment. I have to admit that I definitely have underestimated the impact of regulatory risk when they announced the additional license of 4th Tel-co.
I thought the impact on revenue will not be that significant at the beginning as new entry will need time (at least 1-2 years )to capture the market share, unless there is a huge cost difference, the users will not try to shift their current telco easily (at least that’s for me ..hahaha).
I am totally wrong on this, even before the new telco starts their business here, the price war already erupted among the incumbent. Obviously, this had been reflected in their profit margin which is getting lesser quarter by quarter and of course as a consumer , I am also happy to see that happening with more data per $$.
You may notice that M1 closed at $2.11 on last Friday, which is 5 cts premium over GO price. The market is expecting another major shareholder of M1 i.e Axiata who might see as not satisfied with the offer price to come out with counter-bid.
M1 shares surge above Keppel-SPH bid price amid speculation of higher offer (from shentonwire.net)
( from reuters.com)
“Axiata, which has a 28.3 per cent stake in M1, is also in talks to team up with private equity firms and other companies as it considers options to launch its own offer for a bigger stake in M1, the source said”
Well, I am still holding on my remaining 25 lots and hoping for a “bidding war “ to happen .. how about you? already sold yours and laughing to the bank …or still in the dilemma of “should I sell now or wait for better GO? Aiyoh, I also don't know leh , it seems that in the worst-case scenario, we can just sell it to current bidder at $2.06 if there is no “bidding war”.
Please DYODY , this is not a call to buy or sell, all stocks and price mentioned in this article are just for illustration purposes.