SC & Mudajaya - Is there a better way to do this? The volatility in the share price is so disturbing. SC had to act after getting "the letter". Here, all listed company owners and CEOs would be shuddering, will SC act on any kind of poison letters? It is highly discretionary, if its not, everyone should get the set of rules out in the open.
If I was an unscrupulous trader or someone who wanted to get into a company on the cheap, this might be an excellent way. Say, I like to own a substantial stake cheaply in a good company, e.g. Evergreen or QL Resources ... and I just wrote the poison letter with minimal truth in it. Of course that will make me liable if I was caught. If I wasn't, I could very well collect a substantial amount of shares 30%-40% cheaper and at good volume as well.
Just the fact that SC has said that they are looking into allegations would kill the stock, because people will guess. Is there a better way? How do we justify between claims that are "reasonably truthful" or "reasonably sneaky"? We are already punishing the stock before the jury is back with a verdict. It cannot go higher, it can only go down.
Can we suspend the stock until the investigation is over? That is plausible, but is that OK for a stock to be suspended for an extended period of time? If it takes 2-3 weeks to come back with a finding, maybe that is the lesser evil.
We still do not know what the final outcome will be, but the entire episode gives a lot of room for excessive volatility and possibly even insider trading, by oh so many parties, be it good news, no news, bad news, etc... how do we guard against it?
I am not saying anyone is at fault but we should really try and get to do this in a "better way", I am sure there is a better way, even if it means suspending the stock indefinitely as the alternative is totally unappetizing and discriminatory to genuine investors.
We just cannot let the "bad guys" win at this.
Sime Darby - Sime said on Friday, Aug 6 that it would announce its fourth quarter results on Aug 26. It added that until then, it could not comment on the results of the group "except that we expect the company to report a profit for the year ended June 30, 2010 based on its best estimates".
Just because the rumours has it that you might be losing money, and in the billions ... still does not give the company the right to say that you will report a profit, or am I the only one who thinks that its not OK?
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