ABB: Buyback at 900/share -->Is it easy money?

[magnet]

Just a thought ... is there a chance of ABB delisting (a practice followed by MNCs after buyback) ? I have a itsy-bitsy holding @ 740. What do to with it?

Great price is 900...

Wait till july 1st week an see if ...If at any moment it crosses 900+ dont think twice but sell it...For others any price around 870+ is good to exit....But company fundamentals are strong from what i heard...Only market is not conducive...And i dont think they going for delisting stuff

Anyways for delisting please see this e.g

http://www.fourstocks.com/blog/201001/elentas_beck2_delisting_case_study/454

I bought this share recently for 522 as somewhere there is exclusive news that 850 is their new offer going to come..so took position ...
DOnt buy on my words...Just listen to a piece of news

The same source when pennar industries at 31 gave exclusive news that buy back coming at 45...this news is almost 4-5 months old and no such news around...but still from 31 to 39 it went..though i booked profit at 33.5

 

[magnet]

alright, nicely written post. i have few qs

1. lets say i have 10 shares of ABB. so in that case is company gonna buy all the 100% shares from me or only fixed % of the total holding. (i heard they are buying 60% of what ur holding)

2. what about the payment. is it b4 the shares delivery or after. i mean company gonna collect the shares first & then i have to w8 for the payment. or money first & then shares. (this is kind of impossible )

LogikZ

PS: this might help
http://www.sebi.gov.in/faq/buybackfaq.html

If ABB is not sure it getting shares from institutional investor...
It will send letter to u stating they want your shares at said price >.
Please give your consent...Once they get it ,there might be some formalities(furthur paper work ) or the consent paper it might say u dissolving your holding for the amount...
Than u might get the cheque or necs...But first they will remove the shares from your account

Ofcourse it has to be after...Just like how we used to apply for ipo before getting shares >.now we have asba option

 

[Logik]

well i will sell directly into the market @ any price less than 900 .I always hate this paper work thing (in case of IPOs, rights issue etc). i really have pretty bad experience with IPOs in my early market life. its quite frustrating.

@magnet

y u think/assume the prices gonna increase near the july 1st or so & that too level of 900? .well if the buyback price is 900, then i shud be expected to buy ABB at least arnd 850-860 max, to get 50-40 Rs profit.

i really don't wanna buy it @ 890 levels just to get 10 bucks (that too after lot of paper work & uncertainties).

 

[magnet]

@magnet

y u think/assume the prices gonna increase near the july 1st or so & that too level of 900? .well if the buyback price is 900, then i shud be expected to buy ABB at least arnd 850-860 max, to get 50-40 Rs profit.

Simple reason open offer starts from july 6 to july 26 thats why i said july 1st...And what if share tanks down will the company buy from u >.i said 900 is the max amount at which it will buy but if price is low why will it pay u high...It will buy at same market price>>.Ull get offer only if shares price move above 900 or is around 870 something

Again i wont advice buy at 850....Present price....will do to sell at 860 levels....because it might go above 900 or it wont even touch 870 and taking position on 850 doesnt make sense at all(u need to wait and watch how the share performs in next 20-30 days)..If share is in excess it wont allow it to go higher which we can see now stuck at 825...If it touches 850 try to buy at 820...It might touch that price or it wont....Atleast u will be at safe risk than bigger risk..

E.g I bought piramal healthcare today at avg price of 589....
And though + ive news share went upto 518(since no open offer will come)...So in all i am making loss .i Expected it today to touch 650 on account of open offer at 750.Share went upto 600 got at 588 but later it went down Its all luck.
But in long term i can expect good price as abbot buying shares at 800+ price...ALso money which piramal will get may invest in company...But this short term investment has to be long term now for me

U should learn from experience

 

[magnet]

Save for more now...ill avoid investing in it now or will put money only if it touches 750 level

Read here

http://economictimes.indiatimes.com...right-time-to-get-out/articleshow/5946662.cms

 

[Logik]

Thanks magnet for the posts.......

I read on money control that the company has no intention of de-listing.

I got a Q?

What happen to the shares & capital of the ppl holding stocks of the company thats gonna delist?

 

[magnet]

Thanks magnet for the posts.......

I read on money control that the company has no intention of de-listing.

I got a Q?

What happen to the shares & capital of the ppl holding stocks of the company thats gonna delist?

What u hear about people saying i loss my money in this company...have no idea where it is....

Same about it.....People loose their money as the shares are no longer traded...Best is to give your shares back..and delisting takes place with announcement and not all of a sudden..If it does than seriously u invested your money at wrong place....

For e.g Ranbaxy may be in long run going to delist as the promoters hold 75% shares......but it doesnt mean the company have problems...They might be making money and dont want peoples money since they are not ready to share with people their profit...E.g dividend (which myself haven't got from past few years)..Same is said about siemens being a zero debt company but all this news are like in Air....

 

[Logik]

w8 a min........i am kind of confuse (sorry for that)

so b4 de listing company gonna give an offer to its shareholders that they are delisting the stock & they are willing to buy back shares from u @ certain price.

& this buy offer for delesting purpose is different from the buyback offer for increasing the stake.

so open/buy back offers are of 2 kinds.......
1. for increasing the stake
2. when company is delesting

Correct me if m wrong.

BTW......ABB is 860+ ATM......

whts ur take now?

 

[magnet]

w8 a min........i am kind of confuse (sorry for that)

so b4 de listing company gonna give an offer to its shareholders that they are delisting the stock & they are willing to buy back shares from u @ certain price.

& this buy offer for delesting purpose is different from the buyback offer for increasing the stake.

so open/buy back offers are of 2 kinds.......
1. for increasing the stake
2. when company is delisting

Correct me if m wrong.

BTW......ABB is 860+ ATM......

whts ur take now?

yup u are right

But for delisting i guess company has to own 95% of its floating shares...I am not sure of it...But ya what u got is correct just that i have to confirm whether its 95% share or when they offer buyback for delisting 50% of what they want to buy(i need to confirm that)

Ya it touched 864 today...u can surely buy but at 820 levels

But to be frank such high costing stock personally doesnt interest me now

Because....say even if u buy at 820(including stt,brokerage and all) and sell it at say 880...what u make is just 7% plus if brokerage and other parameter has to be counted your selling price has to be 890...on top of it the short term capital gain u need to pay is 15% of profit..
So in all what u make is 5% in hand....

Also your buying price has to be 810-813(if buying 10 -15 shares) since large part goes into brokerage or to minimize that u have to buy huge quantity say 100 shares(costing 80k and all)

Better u can invest in jp associates or praj industries and sleep for 2-3 years and enjoy 100% of your amount ...For short term also u can invest in stocks trading around 100-200 levels(trading below their 200 Dma level)

Anyways personally ill invest in abb only if it touches 750 level else not

I am trying hard to buy mercator lines and dcb at 42 and 40 levels(will lower buy price if market opens bad..for mercator lines from 58 i have been trying to get at 3rs lower level than that day value...so far didnot got it but atleast money is in my safe custody....I guess theyll give me good profit in short term if market turns positive...Also ashok leyland will give u 10-15% return in short term

FOr high value shares look for jindal steel,tata steel and M & m

Note:: peeps all stocks i said i have no holdings presently ...and i dont work as any broker stuff...Keep my ears and eyes open on tv news and forums...i dont follow techincal but fundamental analysts

 

[Logik]

fundamental huh?
anyways....u must have studied these factors very well. I somehow always find it confusing when it comes to the fundamental analysis & such things like buyback, rights etc. i know the theory behind these concepts.......but i can't trade them logically. i like TA most.

FYI, I am already having ABB @ 750 10 shares.
I am planning to buy more.....& wanna increase my quantity to like 30 stocks or so. I am buying it from 775 levels @ regular falls. & this news suddenly came in.
I think its trading half @ what twas trading 2years back. so i am also expecting 70-75% (min) returns in it form 2-3 years perspective.