Cramer/TSC long on TBR. Interesting panel discussion
thestreet.com
Rob Friedman: Talking about
panic in the market, and what
a strange value market it's
been. When Telebras
(TBR:NYSE ADR) announced
its subdivision, they put up
the 12 different pieces of
Telebras for sale, controlling
interest for sale. And the
money came in from
overseas, from the U.S. and
Europe, the 12 pieces went up for auction. And when the
final bids came out Telebras, with the controlling pieces at
those prices, was valued at I think 295 a share for the ADR
equivalents now assume those were for controlling interest,
for 51% of the companies. So there's a huge premium there.
So if 295 is the value set for the control piece, what's the
balance worth? Do you put a 30% discount on that, a 50%
discount? Whatever you want to do.
The day the announcement came out I think Telebras was
trading at around 130. So that's fairly compelling at that
point, regardless of devaluation concerns and so forth. As
we approached this final subdivision of Telebras into its 12
components the stock went from 130 to 50. At 50 it was
trading at one times EBD, and no one gave a hoot. Actually
they did give a hoot at 50 because it rebounded to 70 in no
time flat.
Jim Cramer: Everybody thinks
it's just a short squeeze from 50
to 70. I'm long Telebras. Telebras
seems to be the great aberration
of this summer/fall period,
because statistically it's just not
supposed to happen. In terms of
the stockpicking world that I live
in, I'll go to my partner Jeff
Berkowitz and start the morning
and say "I shouldn't be in the
business anymore. I should put my whole fund in Telebras."
Let's say they devalue three times. I don't think it should be
here. It's pricing in three devaluations.
Maybe Brazil's in huge trouble. It's still not pricing. ... I've
ridden this thing, I'm under water on it. I bought some again
on Friday thinking that the election might mark more of a
stability in Brazil. This has been to me in my career, I
missed the AT&T (T:NYSE) breakup, so I said it's not going
to happen to me again. I hope I get to see the breakup of
Telebras! |
