Why indeed! There are reasons why institutional ownership is close to zero and the shares are still in the toilet after the huge run up in the market the last few years. India has been on fire yet this stock has done absolutely nothing except perhaps go down. Worse still, the shares were trading for ten times what they are now prior to the $100m or so invested in the build out!
With so much institutional and hedge fund money moving to Europe and the buy back, it's probably a good move to start buying this fund, pays a small dividend and the discount looks like it's starting to shrink. Nice longer term play.
So a flat year and they want the company sold??? I don't have to deal with anything, already banked my money and on the sidelines until I see those promised profits. At least you're only down about 25% now rather than 50% that's got to be encouraging.
Nope, will only invest if institutions return and in my opinion that's unlikely for the reasons I stated. Nice runs in both 2006 and 2011 and was hoping for a third chance!
O.K so why is it so undervalued and why is Ronald Chez who made a ton of money on this company a few years pushing for a sale? Why has institutional ownership dropped 20% in the last twelve months or so. Why isn't this technology being bought? Not being argumentative, just curious about your theory. What have those sellers missed in not seeing a turn around and if the company is failing to execute so badly, why hasn't there been a change in management or that even proposed? Selling a company is a desperate move, it crushes morale and you risk losing key players. Why would this even be a rumor with such great prospects?
Well that's also been my thinking too photon, but there has to be some serious concerns or issues we may not be aware of for some big investors to push for a sale. That's selling the company, not replacing the CEO. Institutional investors in my experience have far more patience and a longer view than retail, do their homework more thoroughly and have access to those running things, so it's a big concern.
When a company looks for a buyer it's generally regarded as something done out of desperation and any buyer will use that to their advantage. Certainly in Silicon Valley one can expect a premium IF you have rapidly ramping growth. Procera may have produced world class technology but it's not being bought, if it were they wouldn't be in this predicament. My forty years in business taught me at least one thing, buyers determine what something is worth and it's only worth what somebody is willing to pay at the time you want or need to sell. To me at this point in their story a sale doesn't look likely or even that beneficial to shareholders, however when you consider their cash position it would make more sense for management, maybe along with an investor or two, to take this company private, if they still believe they can execute. Of course this assumes there are not multiple buyers willing to compete and at this time I think that's a fair assumption.
Personally I don't think a sale is anything to be happy about. It indicates that this is not only failing company but one that doesn't see a future, hardly something another company will pay up for. I was hoping to see some big wins announced and some signs of growth before re entering, evidently that's not likely to happen, too bad.
timing, there is a tendency among investors, as opposed to speculators, to wait and see if their thesis is a correct one before putting their money at risk. The thesis being that under the previous management you were certain to lose and under the new management you are likely to profit. No matter how good the theory, you wait for that growth and/or profit to be achieved before adding or entering. Patience along with good judgement is a requirement to achieve ones goals. Luck is always welcome but cannot be relied on.
My issues have never been about the business, although I do question Raju's ability to manage a large company, but the structure he has created that appears designed for his sole benefit. A look at institutional investment would suggest I'm not alone in this thinking.
Until Raju makes clear his intentions regarding any future IPO in India or the sale of this company, investors will remain on the sidelines no matter how good the earnings or growth. Had he priced his private shares at market rather than a huge discount, or better still, loaned the company funds as many principals and founders do, the shares would be trading at a much higher multiple than they are now with the strong expectation of a return to at least the highs of a few years ago.