Yes he did and it is cause for concern as would be an outright sale. Looking at his history that's what he has done in the past, build a small company and sell. Remember he is basically an engineer not someone with the expertise in running a large company but that is altogether another issue, good managers can be hired but the're expensive so count that out. This last issue is likely the reason growth is very slow, especially profit and notice how he is the biggest beneficiary of the dividend? Pulling out as much cash as he can including having the wife on the payroll as well as his brother. Still think this is a great long time investment?
I doubt it. He has said numerous times he will sell out or re float in India. There was significant Institutional ownership prior to his private share issuance, Bruce Fund, Credit Agricole, Deutsche Bank and many others. If they liked it at $6.00+ more before the build out, why wouldn't they love it now for a quarter of the price and after $100m more invested? This names been around a decade or more, it's not undiscovered just toxic. Anyone thinking they're smarter and got here before the funds, mutual and hedge are deluding themselves, those guys are really smart and do their homework. Good luck to you all, you worked hard for your money, protect it.
With 1,155,000 shares purchased over the last 30 days, that's 12.8% of the total shares issued or over 19% of those shares not held by insiders and institutions, what may seem obvious to some does not to others spending three quarters of a million dollars going long, and there's still virtually no short position. Not making any predictions of course but evidently some are optimistic enough to put their money where others just talk.
Thank you morphisis. I wish it were otherwise but his actions speak louder than his words and self interest is his only agenda. Can you imagine any corporation in the developed world being allowed to have family members on the board? The board is supposed to be there as independent directors representing the best interests of the shareholders. As we both know that's not always the case but this situation would never be tolerated except in countries where corruption still prevails.
Joining him and his brother, quite the family business. Too bad for you if you're not family. Owning 88% he can elect his kids too. He can do anything he wants remember? Including buying back shares at whatever price he cares to pay when this company goes private.
There is no other company trading that has this companies issues and there probably never will be.
Prior to the issuance to himself of 120m privately held shares in 2006 there were 53m shares of which Raju owned 30m. So now there are approx 173m shares and he owns about 150m or 88% of the company. These shares were issued by an Indian company but are not traded on the Indian market only as ADRs in the USA. So what are the implications? The first is that with that huge stake he can do whatever he likes, such as taking the company private by buying the remaining shares that he does not already own for anything he cares to pay. Maybe .88c the same as he paid for his privately held shares, maybe less? Who can stop him? He owns 88% of the company, they are based in India so how would you sue him? Even if you could there are no institutional owners who would have the funds to initiate a suit and American authorities are powerless against an Indian company, the best they could do would to halt trading and how would that help you, he is buying the shares back for himself. Furthermore the Indian authorities could do nothing, even if they wanted to, the shares are not traded in India.
So for those unaware of these facts or who may be tempted to take a long term position or who are curious why there are virtually no institutions owning this company even at these price levels (especially the Bruce Fund famous for taking very long term positions in overlooked companies and that had a BIG position in SIFY years ago at four times the current value) you might want to give much more serious consideration as to the wisdom of owning such a stock.
By the way you can go back and read all my bullish posts from 2005 until 2011. I had exactly the long term bullish view you both express now. But as the saying goes "when the facts change I change my mind" Good luck to you.
I strongly urge you to read the response above. Institutions don't buy companies that dilute their stock 325% to benefit the principal, especially when they cannot take any legal action.
You're obviously unaware of the real issues affecting this stock, that of a huge issuance of privately held shares bought at under market price by the principal and major owner that caused institutions to sell out in 2006 and not return. Previously this was 37% it's now 00.27%. This is of course in addition to not being able to generate any real growth for the last decade.
What's with the "we" timing? You don't own it. Better expressed perhaps as "you" will finally see. Perhaps the future may require a change in nickname to bad timing or perhaps poor timing, we shall see.
No your biggest worry is to wake up one morning and read that a) they are taking the company private, perhaps at less than the current share price or b) Raju is issuing himself another 100m privately held shares @.60c. That's what's worrying institutions.
You should do some research. Ten years ago shares were trading for triple what they are today, nine years ago six times and this was prior to the $100m spent on the build out and a decade of Indian growth. Even those that bought four years ago and still holding are down 80% or more. Institutions who once owned 35% of this company sold out long ago. Take your own advice, do some real research and learn why.