PCCW privatisation blocked by the Appeal Court: Lose-lose situation
A very dramatic ending. The Appeal Court has blocked the buyout by Richard Li. It seemed like the judges have turned 180 degrees against Richard Li and favored the minority shareholders and the SEC during the course of the appeal. We will know soon whether Richard Li will appeal the case or not.
What will minority shareholders gain actually? Share price will probably drop quite a lot when trading is resumed in the next few days. And I believe the share price will have big upward resistance because of all the negative publicity it has got. And if Richard Li appeals, then this case can drag on for a long time and this will again create upward resistance on the stock. It is a lose-lose situation for Richard Li and minority shareholders.
April 23rd, 2009 at 5:03 am
I agree it’s a lose-lose for both parties whose egregious greed continues to destroy what’s left of PCCW. Hopefully there’s no drawn out appeal and minority shareholders who should have exited their losing trade long ago can now go back to their wishful thinking and continue to hold and hope to eternity.
Richard Li’s flagrant attempt to “arb” what value was left in PCCW was not going to be tolerated by anybody given the business environment and his horrendous track record. He too can go back to wishful thinking and continue his losing ways of chasing dying business trends well after the bubble has burst (dot-coms, privitizations, etc) using daddy’s money. Maybe he can start securitizing mortgages in structures which magically transform dirty CCC subprime assets into pristine AAA assets. I hear it’s all the rage these days.
If anything this is a minor win for social equality, although there’s probably more efficient ways to go about achieving such a lofty goal than holding onto losing stock for 8 or 9 years and then spending time and money in court to fight a rich kid who has all the resources in the world at his disposal. And it has to be said, equality had nothing to do with this case anyway, it was all about misplaced greed.