Message Font: Serif | Sans-Serif
No. of Recommendations: 1
The "Asian company" is actually Stetsys Pte. Ltd., and Stetsys US, Inc., the major stockholders of the company, both of which are essentially part of the Shanghai government. The movement of stock from government hands to a private investor is a good thing.

When stock is moved in a large block like that, it isn't done by auction; the damage of 9,676,800 shares suddenly appearing on the market would be far, far, FAR worse.

For this kind of sale, when you want to move somewhere in the range of $100 million in shares, you have to offer a discount to get the institutions to open up their wallets. And since the additional shares add to the 'float,' the buyer is going to expect that to be factored into the discount.

Here's the closing prices and volume during the week of the sale:

02/23/2004 11.140 376,104
02/20/2004 11.500 256,068
02/19/2004 11.720 824,987
02/18/2004 11.250 544,781
02/17/2004 12.110 580,007

The price took a hit, but I don't think the stock was really punished all that much.

The buyers, I'm assuming, are standard institutional investors; mutual funds and the like. The company put on a "road show" presentation to various reps of these institutions to solicit their business.

The SEC filing for the sale, and some PowerPoint slides from the "road show" are here:

(Note: if the line breaks, you may need to "reconstruct" the link in your browser.)

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.