Hi Everyone. I am a first time poster and really enjoy the insight from this board. Obviously you have been "blessed" with some psychos too, but it's actually a bit entertaining.
I have tried to read threads, which is not easy with this system. This seems like an incredible stock, but I have some questions.
1. Why did the stock fall when they reported 3Q? Did they miss?
2. If SJ or SK was so disappointed with the stock price, why don't they announce a buyback?
3. Has anyone met management - I am a little concerned I am going to get a Chinese situation (I know they are Taiwanese, but I am still worried)?
4. Does management own stock or have any reason to care about the stock price?
5. What type of discount do they trade at versus peers?
6. After they become a single Taiwan entity, wouldn't they become a very attractive buyout candidate?
Thanks, there isn't much research available, so this is super helpful.
Speaking of Mosel...has anyone followed their stock in the last few weeks? Went up 7% max daily for a while and went from 2.xx to 7.85. Hopefully, this will provide them with more liquidity and means they won't be selling soon.
Interesting. Maybe their stock is up so much cuz they are flush with cash from selling all their IMOS shares!!!! :-) I have a related question though:
Remember on the conference call when I believe Brian Grad of DLS asked SK/SJ how many shares Mosel has left? They initially said 2M, then somehow later clarified it was actually ~1.8-1.9M now. And then Brian Grad asked if they could find out exactly and SJ/SK said yes they will find that info out for him. I assume they will e-mail that info to Brian Grad (not sure if they said that in the conference call). Has anybody here contacted them to find out what their findings were in this case? I'd love to know how much more Mosel selling we might have to endure before this thing can get some solid footing and start marching higher based on the fundamentals rather than languishing at a price way too low cuz everybody is scared Mosel might dump another 1.9M shares tomorrow.
We all know how great IMOS is, but I think Solly's issue reflects that of a lot of investors. Almost anyone new to the story is likely to be skeptical of something so cheap. A buyback would go a long way to closing the credibility gap.
I realize the Taiwan listing is coming and we should all be rewarded. Still, it would be nice to see management act responsibly and in a shareholder friendly manner via a buyback. I think it would go a long way.
1. One possible reason is the lack of a buyback, which did not give some shareholders confidence. Another is because they gave a lower (but still very high) free cash flow figure than expected during the last conference call because they are notorious for overly conservative predictions when it comes to margins. There was no good, logical reason for the drop.
2. Good question. It's a fantastic bargain right now, they should be buying back as much as they can. They've been very reluctant to spend money before the listing, I think trying to make the balance sheet look good.
3. At least a couple people on the board have met management, and even seen the facilities. Caffeine flew out to see the Shanghai facility this summer, and another poster has met management multiple times and seen the Taiwanese facilities.
4. SJ has 500k shares. Both SJ and SK have a large number of options.
5. The best comparison is Chipbond, the only other company (also Taiwanese) that does outsourcing work on LCD drivers. Depending on what metric you want to use, they are somewhere around 3.5 times the price of Chipmos. You could also compare to a Taiwanese DRAM tester/packager, and then you'd get a price slightly lower, maybe 2.5 to 3 times as high, as DRAM is struggling right now.
6. I guess that depends on the price. There is constant consolidation in the OSAT industry. Chipbond is a little smaller than Chipmos, and they might not be allowed to buy Chipmos anyway due to monopoly considerations. There are 4 (?) larger companies including SPIL who owns a large portion of Chipmos already, but not only have they not shown interest in buying out Chipmos, they were the ones that sold Chipmos part of their current business a couple years ago, in exchange for a partial ownership stake in Chipmos Taiwan. I think the most likely outcome is that Chipmos reaches a higher price level making a buyout less attractive.
Jaret, thank you very much for the detailed answer.
I think I will wait to buy. I am not such a big player like many on this board, but could buy about 10,000 shares. I would rather see if the do a buyback. I would prefer to buy at $12, knowing that I feel good about what management is doing, then buy at $10.60, nervous about management.
Do you have any thoughts on how much the stock would go up on a buyback announcement? Not more than $1 probably, correct?