Delisting

(10-08-2024, 09:17 PM)dreamybear Wrote: Yes, it's heartening that there are many good ones but at the same time, it's possible that sharing happens until it doesn't - a good historical track record isn't a guarantee.

If we look at the Corporate Governance section in Annual Reports, we always see "act in the best interest of the company". I am not sure how does OPMIs fit into the picture. As "outsiders without influence", we do not have inside information nor complete understanding of a business, and business/macro environment can be volatile. On what basis are we to say whether decisions(e.g. capital allocation) are in the best interests of the company ? I believe ideally, people will always strive for a win-win situation, but in an imperfect world, is it possible that certain decisions in the best interests of the company are at the same time in bad interests of OPMIs ? What recourse do OPMIs have then ?

Some possible investment strategies that come to mind are sizing/diversification. But then some questions follow, e.g. are there so many potential life-changing stock ideas to diversify into, does OPMIs have that much capital to make meaningful amt of investments in each stock idea, etc ? Perhaps OPMIs better learn to make (ideally already made) millions before grand... opportunities die.

Hi dreamybear,

For a start, the only guarantees in life are death and taxes. And most importantly, in investing I am not looking at guarantees but assurances.

You seemed to be looking for a golden bullet or some "optimized path". But there probably isn't any. One can only connect the dots forward. Many years ago, our now-successful towkays were taking risks, bulldozing their way through or finding new paths if the bulldoze didn't work. The long term is made up of a series of short term struggles, winning and staying in the game according to our temperament.

So why would this has anything to do with OPMI investing? Because end of the day, I am a better investor because I am a businessman. I am a better businessman because I am an investor.

Well, I guess the team setup to improve the local equity market, could suggest that Temasek make investments in Grab and SEA too (and then get them to secondary list here).

Software firm AvePoint said to weigh second listing in Singapore

AvePoint, which counts Singapore’s 65 Equity Partners among its investors, is working with advisers on a possible listing, the people said, asking not to be identified as the matter is private. The potential capital markets transaction could take place as early as in the next 12 months, the people said.

The company was founded in 2001 in New Jersey and now has over 21,000 customers in more than 100 countries, according to its website. It listed on the Nasdaq in 2021 and the following year invested S$100 million (US$76 million) in a new international research and development hub in Singapore.

AvePoint received an anchor investment from Temasek Holdings Pte-backed 65 Equity Partners in 2023.

https://www.businesstimes.com.sg/compani...-singapore

(10-08-2024, 03:14 PM)CY09 Wrote: For investors of Singapore markets, it does seem to be a mentality that we have to hope for a delisting but the value of the offer will be a discount to the sum of all assets.

I think d.o.g.'s post sums it up nicely. I think it makes sense for sensible buyers(whether controlling/OPMIs) to buy at the level where they can expect to make a profit.

So I guess, for privatization plays, OPMIs have to reverse engineer the "appropriate" entry price based on an estimated(probably more art than science) range of expected profit margin of the controlling buyer.

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https://www.valuebuddies.com/thread-64-p...#pid136631
"It should be obvious that the buyer of a company expects to make a profit, whether through extraction of cash from operations or from a future sale of the company. This means that if the buyer thinks the company is worth $1, they will NOT pay $1 because then they won't make any money.

Crudely speaking, in any M&A deal a buyer should aim to make at least 50% in order to allow for errors in valuation or mistakes in future operations. So for a company whose fair value is $1 the buyer would likely bid no higher than $0.67."

(13-09-2024, 04:37 PM)dreamybear Wrote:

(10-08-2024, 03:14 PM)CY09 Wrote: For investors of Singapore markets, it does seem to be a mentality that we have to hope for a delisting but the value of the offer will be a discount to the sum of all assets.

I think d.o.g.'s post sums it up nicely. I think it makes sense for sensible buyers(whether controlling/OPMIs) to buy at the level where they can expect to make a profit.

So I guess, for privatization plays, OPMIs have to reverse engineer the "appropriate" entry price based on an estimated(probably more art than science) range of expected profit margin of the controlling buyer.

------------------

https://www.valuebuddies.com/thread-64-p...#pid136631
"It should be obvious that the buyer of a company expects to make a profit, whether through extraction of cash from operations or from a future sale of the company. This means that if the buyer thinks the company is worth $1, they will NOT pay $1 because then they won't make any money.

Crudely speaking, in any M&A deal a buyer should aim to make at least 50% in order to allow for errors in valuation or mistakes in future operations. So for a company whose fair value is $1 the buyer would likely bid no higher than $0.67."

hi dreamybear,

Unfortunately, market valuations are not static. The market is forward looking and when it smells a FV impairment, the BV discount will widen before the impairment is made at the end of the FY.

Frequently, when one buys at a "deep discount", it doesn't turn out to be much of a bargain as Mr Market is proven right later.

Therefore for privatization plays, IMHO it is not about valuations but about possibilities. Possibilities are made higher via catalysts/Mgt intention etc. I do have some "privatization plays" in my portfolio but I only bought them because of the "structure" and not because they are at "deep discount".

Will "deep discount" work? Sure it may and the deeper the discount, the higher the IRR. VB ghchua had also correctly pointed out that BV will grow over time and if (that is, if) the discount doesn't widen, the investment is in the green too. But what are the battling odds? Pretty low, IMHO. The only way to overcome those battling odds is to buy a big number of such stocks and have the temperament to wait. As folks who did not get rich after Grandma died, we must account for opportunity costs of waiting too.

(11-08-2024, 11:39 AM)weijian Wrote:

(10-08-2024, 09:17 PM)dreamybear Wrote: Yes, it's heartening that there are many good ones but at the same time, it's possible that sharing happens until it doesn't - a good historical track record isn't a guarantee.

If we look at the Corporate Governance section in Annual Reports, we always see "act in the best interest of the company". I am not sure how does OPMIs fit into the picture. As "outsiders without influence", we do not have inside information nor complete understanding of a business, and business/macro environment can be volatile. On what basis are we to say whether decisions(e.g. capital allocation) are in the best interests of the company ? I believe ideally, people will always strive for a win-win situation, but in an imperfect world, is it possible that certain decisions in the best interests of the company are at the same time in bad interests of OPMIs ? What recourse do OPMIs have then ?

Some possible investment strategies that come to mind are sizing/diversification. But then some questions follow, e.g. are there so many potential life-changing stock ideas to diversify into, does OPMIs have that much capital to make meaningful amt of investments in each stock idea, etc ? Perhaps OPMIs better learn to make (ideally already made) millions before grand... opportunities die.

Hi dreamybear,

For a start, the only guarantees in life are death and taxes. And most importantly, in investing I am not looking at guarantees but assurances.

You seemed to be looking for a golden bullet or some "optimized path". But there probably isn't any. One can only connect the dots forward. Many years ago, our now-successful towkays were taking risks, bulldozing their way through or finding new paths if the bulldoze didn't work. The long term is made up of a series of short term struggles, winning and staying in the game according to our temperament.

So why would this has anything to do with OPMI investing? Because end of the day, I am a better investor because I am a businessman. I am a better businessman because I am an investor.

Anything whose outcome is uncertain can be considered taking a bet, and this includes investing, value investing. There are many more experienced and qualified VBs than me, I am probably some 10 years late or something, going by the post below. Better late than never, I suppose. 

Even if an investor strives to better his/her odds by experience, diligence(not saying these are unimportant) but how does it compare with the wider environment being conducive ? Having spoken with successful business people / property investors, one common theme is "last time was easier". The world/environment is just getting more complex, perhaps inevitable due to the nature of evolution.

So, the sooner one "made it"(collect enough winnings from successful bets) and move on, the better - make your millions before the odds get more and more unfavorable.

https://www.valuebuddies.com/thread-518-...ml#pid4299
" SLC81 is right by highlighting the word "odds" and odds is the key to differentiate what is a gamble and a good bet(value investing)."

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Since the thread is on delisting, another invaluable post/thread :
https://www.valuebuddies.com/thread-218-...ml#pid1212

I guess the million dollar question is how to foresee the intention of the management in the realization of value for shareholders. I suppose it is betting ?

(19-09-2024, 08:26 PM)dreamybear Wrote: Even if an investor strives to better his/her odds by experience, diligence(not saying these are unimportant) but how does it compare with the wider environment being conducive ? Having spoken with successful business people / property investors, one common theme is "last time was easier". The world/environment is just getting more complex, perhaps inevitable due to the nature of evolution.

So, the sooner one "made it"(bet successfully) and move on, the better - make your millions before the odds get more and more unfavorable.

hi dreamybear,

It is only natural to feel the last million that has been made, will always be easier than the next million that hasn't been made.

Do we start looking for a pail when the sky start raining gold, OR do we get ready our pail and position before the sky rains gold?

"Last time was easier?" These successful people you talked to, were either giving you a perfunctory answer OR in good intention, they knew how hard their path (and how the odds were once stacked against them) and so they decided to give you the realist-bear answer.

Buffett made 99% of his wealth after the age of 65years old. None of us have his genius and temperament but that does suggest we should try to extend our life-way and run-way and then continue to dream.

P.S. I should stop here as it is getting out of topic!