When Raju issued himself 120m shares at a third of the then current market price he diluted the shares by four and destroyed shareholder value from the $8s back under $2. In any western country he would have been sued by Institutions and the SEC and when he announced those shares would not be paid for until funds were needed he would be accused of fraud. He could have done a conventional offering at market price or even a private offering at current price and paid for immediately and that would have been tolerated by Institutions and shareholders especially given the companies prospects. Institutions fled selling out their 35% holdings and the analysts covering the company dropped coverage, he totally destroyed any trust he made have had, showed his only interest is self enrichment and he could care less about his shareholders. That is why shares drop even after great earnings, there is no support and support comes from Institutions that would otherwise own considerably more than the previously mentioned 35% especially considering the millions that have been spent on capital expenditure. When I loaded up at $1.45 prior to the private issuance I was nor alone in expecting a quick return to the $15 level of 4/2006 and a target of $30+ within a year or two. Here we are two and a half years later and the shares can't even reach $3 less than half of what I sold at.. The final nail in the coffin came when Raju was quoted as saying there would be a further offering in India at some time in the future, some on this board assumed it would consist of his selling his privately issued shares, Institutions and most previous shareholders like myself remain sceptical and think there will be further dilution. We can still profit from trading around earnings but in my opinion you can forget about big gains unless Institutions and analysts return and I just don't see that happening, they think Raju is a #$%$. Everything I have stated can be verified on this website and Google.
I am agree with you...Raju is playing with minority Stock holders. He knows that because of 86% of stock owns by him , minority stock holders can't do anything. He diluted 120 Million shares at $ 1.00 price(I think I am right) and now owns 154 million shares out of 178 million total shares. SIFY's quarterly sales is 40 million US dollars and Total market CAP is 356 million which is quite high compare to sales. Even though with 400 million dollar Yearly sales predicted in next 2 , this company will not make more then 40 Million Yearly. It will be very tough to say that stock price will go above $ 3.00. Big Mutual fund will not buy any shares of this company until market shares of minority investors increases and that will not happen any time soon.
My only comment is that if SIFY makes money and remains profitable is no doubt in my mind that institutions will return in hurry very soon. Wall Street is very forgiving for the company's past if somebody with deep pockets feels that money can be made.
The big guys don't give a d@mn on what Raju done yesterday if they feel that they can make money on what Raju is doing today.
And what is a better prove that he is doing the right thing right now than bringing up a money losing company to be profitable one ?
This is my bet on my 95 thousand shares.
Just wait couple of more quarters and you will see that the past doesn't count no more.
I have no doubts that SIFY has a shady past but I'm impressed on on what they accomplished in the present. In my opinion is a achievement hard to beat to bring this money losing company on a path of profitability now when India's economy is in trouble.
If they can make money in a such a harsh economy when businesses are cutting back instead of expending I'm guessing that they goanna do exceptionally well when India's economy is bumming. This is the risk that I'm taking.
under_dog I respect your logic, greed usually overcomes fear but when you introduce thievery into the equasion it may upset things a bit. Institutions invested nearly a decade ago so this name is not new to them, they are aware of the growth but remain sceptical about how much they will participate if there is further dilution with another flotation in India or an outright sale to a bigger company or who knows what else? They don't like unkowns. But you are correct that if there were a return by Institutions who took a 35% owbership or more of the ADRs it would be a very bullish signal and I think $15 would be achievable and with time maybe a lot more. But that's a very big if. Good luck to you!