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Thursday, June 9, 2011

MAA - Cried wolf again?

The deal just gave me the impression of owners trying to make a last attempt at gaining profit from share trades. Who's the one releasing news of 70% MAAB shares sold for RM1.2 bil? (Figure out yourself) And the shares went ballistic. But just yesterday it made another application to sell NOT 70%, but 100% of MAAB, at ONLY RM344mil. What a huge difference!! From RM1.7bil to only RM344mil for 100% MAAB. Something seriously wrong there innit?

Another question: How will they use the proceeds from the sales? Do we have confidence in  the management being able to deploy their cash to good use? A wolf will always remain a wolf. A tiger does not change its stripes. Minority shareholders will always be at a loss to these big wolves. 

Moral of the story: These kind of shares (Bad earnings, management who is not bothered about shareholders, rumor-filled) are only good for hit and run. They just cannot be held for long term and cannot be hoped to be able to reward shareholders in the long term. As for MAA, we can't hold for long term, thinking that they will be able to utilize their proceeds efficiently or reward shareholders with some capital repayment or something like that. MAA still has the same boss and its history speaks for itself.

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