Archive for the ‘Not folly’ Category

I am no expert in financial ( and especailly IPO) matters, but here are my thoughts about the fears/falsehoods of the Safaricom IPO.

(i) Why are they selling it so low or is that the worth?

They ( them ) want to buy it cheap. And they want you to support it, so they let you also eat a little. Say you get your 2,000 shares. You own ( 0.0000565% of the 25% of safaricom ). Each of them get their 100m shares. One of the them now own 2.85% of 25% of safaricom. He has 50,000X more than you. Based on this transaction alone, his life is gonna be improved 50,000X yours! If the shares were priced at Ksh 30, he would not buy as many shares.

(ii) Will i make a kill?

They do not care whether you do or do not, as long as you think you will, they are happy. They are waiting to snap up what you are willing to sell. Now, if you sell at Ksh 30 ( look my shares increased by 600% ! ), they buy them all at $0.5 a share. That my dear, is still a bargain for a profitable modern phone company. Now he has 200m more shares. He owns 9% of 25% of safaricom.

(iii) The shares will drop below Ksh5 after listing.

Not likely, surely Ksh 5 is low enough. But if they did, much much better for them. As (ii) suggested, they are waiting to snap them up, so, that is the best thing that could happen to them. If the shares drop to Ksh 2.5, you may start thinking, well, let me let them go before it gets worse, and rush to sell. Your loss. Wise investors buy when the people are panic selling.

(iv) I do not know who owns Mobitelea, so i suspect the deal.

Odegle Nyang could not have said it better:

are you going to stop buying this share from GOK just because you dont know who the other owners are? and when you normally buy shares at the NSE, do you normally insist on knowing the others million shareholders before placing a bid?

Same question: Are you in the US? DO you own stocks? Do you own mutual funds? Do you know who else owns the same funds? Do you know that some of the investors brought money from dubious ( drug, blood diamonds, etc ) gains? Do you own KenGen or EABL or Unga? So does Pattni, Somaia, Biwott, Moi, Kabuga.

(iv) Why allow foreigners to buy public property so cheaply?

Let us assume safaricom is as valuable as they say it is. Why allow foreigners to compete with Kenyans at such a low price? We all know, the best way to kill these 2 two birds with one stone, is to sell to the retail kenyan public as much shares as they need, and let the foreigners buy it from the public after listing. Then you are assured of post IPO price increase ( and mwananchi gains) and Kenya gets $$$$ from the outsiders. OK, what did we say? These foreigners are them! That is why they are allocated a huge portion. [ Who knows, perhaps, when the foreigners are ready to send their chapa to pay, the $ may strengthen vs the Ksh. Keep watching ]

(v) I have principles, this deal is not clean!

The duly elected GOK were adamant in selling this public company ( including your portion, despite your protest ) and they have. Perhaps you can still protest by buying and keeping your share of the company, and using your proceeds to do a good cause. Remember, the company was paid for by you. If “thieves” ( Mobitelea Ventures Ltd, Vodafone, they ) steal from you, and they offer to return a micro portion of what they stole, why would you reject it?

(vi) How can i protest this?

The best way would have been to protest at Safaricom by public mass action whereby we all say, “we are not using safaricom until Jopseph tells us who Mobitelea is and Kimunya makes everything transparent”. But, we are Kenyans. We are ignorant that we posses such powers. And we plain do not just care, as long as we make a few Shillings killing.

But, you can still protest, modestly. If you believe the foregoing arguments, then the best way is to buy the shares and dig in for as long as it takes. By doing so, you will deny them the chance to grab more of this property cheaply. Look at it that the money you put in ( 10K, or 50K) was lost. But then again, no gain without risks.

(Vii) Bottom line, this is the new in-the-open Land Grabbing

You see my Friend, this is the new Land Grabbing scheme. Moi and his boys used crude methods ( though they wisened up towards the end- e.g. Mobitelea etc). Their MOD was: all for me, nothing for you. But these new boys on the Hill ( Kimunya, Stanley, Jimna, Jimmy, John ) they are smart. They do it openly, and with your blessing. 200,000,000 for me, 2,000 for you. And, because we are all greedy ( and are Land Grabbers at heart ), we bite the bait.

(viii) My call: a buy

So, i will write off 200K, put aside 20K for the IPO, and 180K to wait for the villager to to sell his. If i lose my 200K, at least i will have helped inject $3K into the KE economy.


Read Full Post »

Listen to Neilt Turok’s TED talk http://www.ted.com/talks/view/id/232

Read Full Post »