Hi Merry,
If I do not laugh at myself I will have to cry. Thinking back 5 years from now, we would be laughing whether we are still in the market or not, so we might as well start laughing now.
On PCCW, now we are in the phase on dump to prepare for pump, another classic HK move, where all the bad news is leaked out, not denied by management, driving down the market, sometimes better aided by a cooperatively frightening market place. The stock price drops way down, freezing all minds still owning the shares. At precisely the critical time, adeptly recognized by the security houses and highly paid consultants, an announcement is then made by management for a rights offer, allowing all shareholders, including the insiders, to put in new money at discount to the market price based on shareholdings. The market is trained to value the company based on the rights offer price, and the market price drops a few more notches. Outsiders are then understandably shy about committing new funds to a company that just tanked 80-90%. Insiders subscribe to the new shares allotted to them, and also take up the new shares refused by the outsiders, and the financial consultants start to work on the plan for pump and dump. The HK market is a very kind, though not necessarily gentle playground.
Again on PCCW, the Network of the World is now being cut back, with a few secretaries being made redundant and maybe even some genuine restructurings and redirections, with management known to be concerned about the debt level that they apparently were not concerned about before, with the press and fund houses ferociously talking the share down. So, get ready to buy. |
