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Technology Stocks : Nam Tai Elec. (NTAI)
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To: mod who wrote (1551)2/10/1999 5:00:00 PM
From: Ron Bower  Read Replies (2) of 1696
 
mod,

Could be, but I've been following Koo's activities over the last couple of years and find it hard to believe that he let the management of a bankrupt company outdo him on a deal like this.

The scenario as I see it:
Namtai bought with intentions to liquidate, but under their control.
Caused Albatronics to write off the doubtful debts making it totally bankrupt.
Transferred the write-offs to Namtai to drive the share price down so the company could pick up shares cheap.
Distrust of the way Namtai has been operating aids them.
Albatronics has contracts that they will be unable to fill, Namtai will get what they can.

Result- Namtai picks up the shares in the secondary issue for 1/2 the amount they received. Any Albatronics business they can pick up is gravy. The $10M is far less than the amount they generated from operations, less than the amount they will save in a stock buyback, likely less than they will earn from the business they pick up.

At a certain point, Namtai will start buying, probably at the level of cash/share (around $7.00) = getting the company for nothing. I look for another share repurchase announcement this Q.

Note: company buyback substantially increases value of Koo's holdings.

Trying to think like Koo. -G- He's found US investors to be easy pickings. If he can't get the price up, force it down and buy it back.

JMHO,
Ron
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