M1: Pre-Conditional Voluntary GO at $2.06


image credit to straitstimes.com


有人欢喜有人愁

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”.


Cheers !!






Please DYODY , this is not a call to buy or sell, all stocks and price mentioned in this article are just for illustration purposes.

Comments

  1. Hi STE, bump into your article via thefinance. I have only 5 lots average about $1.90+ with 2 years of dividends. Hence I sold 2 lots at $2.11 and remaining 3 lots hoping to get a better price.

    With Axiata holding only 20+% of the shares, my view is that they may not likely offer much higher price, and it's not even official news from Axiata.

    ReplyDelete
    Replies
    1. Hi Eye of the Srorm,
      Congrats !! yes , take some profit and hope better price for remaining lot is a good strategy , yup , as you said , no official news from Axiata and also they will need to team up with other private equity firm to bid for this as it might be too stretched for their balance sheet if they would have to fork out billions alone just for M1.
      Cheers !!

      Delete
  2. I also holding out for the higher bidding. But I might just sell if the volume dwindled and go back to 2.06 or start moving towards 2.2

    ReplyDelete
    Replies
    1. Hi Sillyinvestor ,
      Good strategy , TA might help in deciding what price to let go...hope we are right ..:D
      Cheers !!

      Delete
  3. Not selling although in profit. Offer is not a fair value. Collect dividend and wait for a better offer. Axiata has the capacity to offer up to $2.50 according to Daiwa Capital which is active in MY. They are 100% owned by Kazahnal (MY SWF) and has telco biz in 9 countries. The next SingTel coming?

    ReplyDelete
    Replies
    1. Hi Henry,
      Congrats !! for the profit on M1 and thanks for the info .yah , Khazanah is like Temasek ..got bullet to fight back .. hope they will do a counter-bid of $2.3-$2.5 ... :D than more 888 for all ..
      Cheers !!

      Delete
  4. I am also holding on to M1 which I bought way before any news of telco war... Back then i was above $3~

    Well, no choice. I just have to hang on to it.

    ReplyDelete
    Replies
    1. Hi My Investment Machine,
      Wow ! $3 ... must be a painful experience .... but this world of investment ... sometime win , sometime lose ... yup , will have to hang on it and hope for the best !! hope would make $$ from other counters ...
      Cheers !!

      Delete
  5. Hi STE,

    While we normally read how well bloggers have profited from the market, not many are as open and sincere to share their losses, and with such detail information like you have shared. Seriously, for me, I find I tend to learn more when I analyze losses, and how I should avoid them.

    Thumb up for your sincere sharing.

    ReplyDelete
    Replies
    1. Hi WY ,
      Thanks for the comments , yah , losses are simply inevitable to some extend and as you said, it is important to do a reflection and learn from from these losses and cope with the "psychology of loss "...turn these negative experience into a positive one.
      Cheers !! :D

      Delete

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