Tuesday, December 23, 2008

Is Satyam (SAY) a Takeover Target?
Check it out:

Shareholder Pattern

Market Capitalization
Valuation Based on Indian Share Price (In INR)
Share Price: INR 140.70
Market Cap: INR 94,336,436,525

Valuation Based on ADR Price (In USD ($))
ADR Price: $7.35
Market Cap: $2,464,011,402

Cash In Hand
Total: $1,200,000,000
Per ADR: $3.58
Per Indian Share: INR 85.91

Why is Satyam vulnerable ?

  • Lack of confidence in Satyam board, after the Maytas takeover episode

  • Reputation damage after World Bank barred Satyam

  • Loss of clientele due to the global Recession

  • Lack of promoters control over the company

All the above make a case for a takeover bid; the cash value of the stock is itself lucrative enough to consider this target.

Views expressed above, are solely based on my own analysis.
All the numbers provided here are in the ballpark.

Monday, October 6, 2008

Indian Tech Companies and Recent Downturn in Markets

Tech companies from India lost more than double the amount the overall market lost in the last month. No surprise this happened, as Financial Services contributed ~19% of the technology spending in 2007. Surprisingly, these tech companies lost more than what the financial companies lost.

Of the 1.3 billion that companies spent on information technology in 2007, about $1 of every $5 came from the financial sector. The break-up goes like this:

- Government: 13%

- Financial Services: 19%

- Manufacturing: 12%

Source: Fortune Oct 13, 2008

More pain to come !

Total household networth in the US at the end of the Second Quarter of 2008 was $56 trillion.

From 2002 through the end of 2007, US household networth rose from $39.2 trillion to $58.7 trillion.

The housing correction of $2.7 trillion from end of 2007 to second quarter 2008 was marginal, compared to the $19.5 trillion rise it saw from 2002 to 2007. We have lot of correction to take place from now and in the next few years.

Considering that only 5 US equity mutual funds (out of 9,100) had positive return YTD (as of Sep 17, 2008), it's hard to digest how much pain we are yet to see.

Data Source: Fortune Oct 13, 2008

Monday, February 4, 2008

US Consumer Spending

Read through these charts, and figure out how US is fueling the consumer spending for the past few years.

Saturday, February 2, 2008

Housing Meltdown

See the Charts and you will agree that the prices have gone too far ! They may have to come down.

Tuesday, January 29, 2008

The deal: Buy high, sell low

Why shouldn't Citi and other financial companies raise capital from US itself? The offer that Citibank proposed to Abu Dhabi's Sovereign Fund is very attractive. Can’t Citibank put a similar proposal to the US Retail Investors and keep the ownership within US?