Investing theory 5 - Cigar Butt Companies
My third Pump and Dump Article with a Conscience
Philip ( buy what you understand)
Publish date: Fri, 05 Jun 2020, 08:45 AM
Hi all,
This is Phillip here.
First let me set the stage.
https://www.theedgemarkets.com/article/setting-right-precedent-takeover-withdrawals
Now,
What happens if someone shows you the money, and tells you that they are going to buy your business from you? You will write an agreement, submit documents, get stamping and do the deed. However, once the documents are signed, at no point in time are you allowed to suddenly cancel the agreement on a whim.
This is what TA tried to do on its privatisation deal in May, which I believed had put a damper on its VGO activities.
The deal is such:
In a move to take TA Global private, TAE had proposed to buy the remaining 39.83% stake it does not own in the property firm via two options, including a cash offer of 28 sen per share held.
The second option was a share swap based on an exchange ratio of 0.4211 new share in TAE to be issued at 66.5 sen each for every TA Global share surrendered.
Now, this is admittedly a very bad deal for the original IPO holders who had bought shares at RM0.50 each. They are now being forced to take a haircut in receiving a cash offer of 28 sen or to swap shares in TAE at 66.5 sen, even though the current price of TA enterprise is now valued at RM0.52.
Unfortunately this is neither here nor there.
Let me put it out right now, I do not trust the management capability of TAE nor their business model.
However,
I do believe in Arbitrage, and barring any sort of Renong put option problems where Halim can just say I'm sorry, I do believe that this VGO is solid.
At the current price right now of 23 cents, I do believe there is a HIGH (but not guaranteed) possibility that our dear TAE is going to be forced to purchase the balance of shares at 28 cents, due to the ill effects of Covid-19 and the lack of good prospects for the future of TAGB in this environment. More importantly, if someone is trying to finagle their way out of paying money, they are sure to believe that TAGB is worth less than 28 cents.
With TAE's VTO withdrawal application rejected, the group's non-interested shareholders will get to decide whether to vote for or against TAE’s proposal at an extraordinary general meeting.
However, this still remains to be voted for or against TAE proposal at the next EGM.
I do believe that this is an extraordinary sequence of events, and that the rest of the 24.49% of minority shareholders will take whatever bad deal they can get out of the market conditions and go for resolution. as this amounts to around 304m of float, taking a 50% haircut is better than looking at a bad prospect in the future. I do feel sorry for the shareholders who trusted in ta global to lead them out of this, but the secondary option to strengthen the company by merging with TAE could also provide some form of survivability out of Covid19, as the market economics
As usual,
I hope you learn something new today. FYI, as you can see from my portfolio listed, I have a small ownership in TAGB bought recently.
More articles on Investing theory 5 - Cigar Butt Companies
How to value Bonus issue, Rights issue, warrants
Created by Philip ( buy what you understand) | Oct 14, 2020
My Second Pump & Dump Article - How to pump with a Conscience!
Created by Philip ( buy what you understand) | Apr 11, 2020
My First Pump and Dump Article - How to pump with a CONCIENCE!
Created by Philip ( buy what you understand) | Jan 28, 2019
Discussions
Be the first to like this. Showing 17 of 17 comments
Tony has to finance the takeover of tagb by subscribing shares in Tae at 66.5 cts a share. This will cost tony hundreds of million. After takeover of tagb, tony got to look for a few hundred millions to GO for Tae at 66.5cts. Correct?
2020-06-05 10:58
YA but SC already rule Tony cannot pullout from the GO mah...no cock & bull excuse loh....!!
Posted by Seek > Jun 5, 2020 10:58 AM | Report Abuse
Tony has to finance the takeover of tagb by subscribing shares in Tae at 66.5 cts a share. This will cost tony hundreds of million. After takeover of tagb, tony got to look for a few hundred millions to GO for Tae at 66.5cts. Correct?
2020-06-05 11:01
Your analysis very sohai loh...!!
If everybody dies like u say who will survive leh ??
Lu pakai otak lah...! Bodoh...!! Again talk like cock...how can half infected leh ??
Posted by stockraider > Jun 5, 2020 10:39 AM | Report Abuse
Yes u can buy TAGB at 23.5 to 24 sen and accept the GO at 28 and u make about 20% gain....ask yourself worth it or not ??
Worth it u make 20% gain loh...!!
2020-06-05 11:04
NO risk no gain. Ultimately there are many aunties { just park thier $$$} in their bank. Happy getting 2% per year without realising inflation is double the rate. Everyone has his or her own risk
gauge. Nobody get rich by sitting on his $$$° this is the reason why entrepreneur take the risk to start a business
2020-06-05 11:15
Philip ( buy what you understand)
yes, I am content to wait 1 year for the results of this to happen, which I think will happen sooner or later.
With covid19 in the middle of things, you can either take money or join up with TAE. better something than nothing.
For me, it is simply arbitrage.
2020-06-05 11:18
I totally agree.
I prefer raider strategy compare with philip which both mean the same thing.
This is because raider strategy offer higher return and safer on the down side, in addition if you hold TA shares, you can have a say and vote for the deal and help the GO to go thru.
Posted by stockraider > Jun 5, 2020 10:39 AM | Report Abuse
Yes u can buy TAGB at 23.5 to 24 sen and accept the GO at 28 and u make about 20% gain....ask yourself worth it or not ??
Worth it u make 20% gain loh...!!
Not worth it.
1. Tony can derail the deal by getting his macai (Tony & related party cannot vote vote loh} to vote against mah...!!
2. If that happen...u will be stucked with a lost making...almost empty hotels assets due to worldwide covid19 mah...!!
Conclusion
I think better option is to buy TA the mother loh....if the deal get derail u still can have solace u r holding on to a well known broking firm that experience record breaking volume transaction in malaysian history loh....!!
If TAGB is successful ...u can accept the GO on TA too...and make 30% gain loh....!!
Philip proposal could be good but risky loh...usually engineer do not know how to financial arbitrage N chose the least & best option...cannot blame him loh......!!
2020-06-05 11:24
Never like TA or TAG { my own view } remember TAG was a spin-off from TA enterprise. Only Tony make $$$.other shareholder & retailers was left holding his still born. TAE has withdrawn it's voluntary takeover offer TAG ( SC has rejected it's application . But Tony has other means to derail the scheme
2020-06-05 11:28
Correctloh...this is the time we punished Tony for his bad karma mah...!!
Vote for the GO loh....!!
Posted by Jonathan Keung > Jun 5, 2020 11:28 AM | Report Abuse
Never like TA or TAG { my own view } remember TAG was a spin-off from TA enterprise. Only Tony make $$$.other shareholder & retailers was left holding his still born. TAE has withdrawn it's voluntary takeover offer TAG ( SC has rejected it's application . But Tony has other means to derail the scheme
2020-06-05 11:31
Looks like Philip getting senile
He attacked Calvin when calvin posted in PPHB and claimed PPhb belonged to him. Calvin told his friends to Dump Pphb and buy Nylex which has better potential
This morning Philip came to disturb my Great Stock called Scomies
See
https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/2020-06-04-story-h1508011667-SCOMIES_7045_MOST_UNDERVALUE_WITH_HIGHEST_POTENTIAL_FOR_PRICE_REBOUND_C.jsp
Now i must warn all not to follow Philip buy TAGB
Both TA & TAGB were once recommended by me. So I think I know TA people quite well. If Tony wants to get out he will still get out
Tony already know Hotels all over the World including USA are in very bad shape just like many Hotels closing in Malaysia
TAGB will now be a water logged jammed up stock which won't move but a waste of tme
Philip should have kept his TopGlove
But loud mouted Philip deserve to lose and Calvin finally bought TopGlove C74 at 82.5 sen (so happy now)
Calvin already sold both TA & TAGB and gone into Gloves, Face Mask & Sabitizer (Nylex)
NOW ALSO TIS GREAT SCOMIES WHICH WILL GIVE 200% TO 300% UPSIDE
READ AGAIN
https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/2020-06-04-story-h1508011667-SCOMIES_7045_MOST_UNDERVALUE_WITH_HIGHEST_POTENTIAL_FOR_PRICE_REBOUND_C.jsp
2020-06-05 11:40
I think calvin is wrong to have sold so early mah!.
Just be prepare to harvest the bounty loh...!!
What can Tony do ??
Get his macai to buy TA and vote against the deal loh...!!
But Tony cannot give too much help bcos SC is watching him like a hawk loh....!!
Remember Tony is an ex convict Security law...he need to be very careful mah....!!
Posted by calvintaneng > Jun 5, 2020 11:40 AM | Report Abuse
Looks like Philip getting senile
He attacked Calvin when calvin posted in PPHB and claimed PPhb belonged to him. Calvin told his friends to Dump Pphb and buy Nylex which has better potential
This morning Philip came to disturb my Great Stock called Scomies
See
https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/2020-06-04...
Now i must warn all not to follow Philip buy TAGB
Both TA & TAGB were once recommended by me. So I think I know TA people quite well. If Tony wants to get out he will still get out
Tony already know Hotels all over the World including USA are in very bad shape just like many Hotels closing in Malaysia
TAGB will now be a water logged jammed up stock which won't move but a waste of tme
Philip should have kept his TopGlove
But loud mouted Philip deserve to lose and Calvin finally bought TopGlove C74 at 82.5 sen (so happy now)
Calvin already sold both TA & TAGB and gone into Gloves, Face Mask & Sabitizer (Nylex)
NOW ALSO TIS GREAT SCOMIES WHICH WILL GIVE 200% TO 300% UPSIDE
READ AGAIN
https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/2020-06-04...
2020-06-05 11:56
Philip ( buy what you understand)
Wow my wife bought supermax shares at 90 cents 100 million ringgit, how come she don't show off like you do? She more happy then u woh.
>>>>>>>>>
But loud mouted Philip deserve to lose and Calvin finally bought TopGlove C74 at 82.5 sen (so happy now)
2020-06-05 13:02
I REMEMBER TELLING RAIDER NOT TO BE A SOHAI, SELLING HIS WINNER SWITCHING TO LOSERS LOH...!!
2020-06-05 13:39
Philip ( buy what you understand)
Why disturb? I give credit where credit is due. Your SCOMIES already go up by 50% from 11 sen during your first article to 16 sen during your latest article. What are you saying? It's a Chun Chun call, how did congratulating you become disturbing? Very bad Christian la you.
>>>>>>>>
calvintaneng Looks like Philip getting senile
He attacked Calvin when calvin posted in PPHB and claimed PPhb belonged to him. Calvin told his friends to Dump Pphb and buy Nylex which has better potential
This morning Philip came to disturb my Great Stock called Scomies
2020-06-05 13:41
I rememer U told Philip mah...!!
Posted by stockfucker > Jun 5, 2020 1:39 PM | Report Abuse
I REMEMBER TELLING RAIDER NOT TO BE A SOHAI, SELLING HIS WINNER SWITCHING TO LOSERS LOH...!!
2020-06-05 13:55
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Interesting to see what Tony has up his sleeves now with the deal backfired.... Original offer price is at substantial premium to both TAG and TAE current prices, no-brainer to take the cash straight given the pandemic shit....Then again, wait and see for the old fox
2020-06-05 09:35