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VONE 50 million shares sold already. The IPO was 21.3 million and the private placement was 196 million. So the total shares among the public is about 220 million. This is the ultimate holding company for KD and his life time achievement. This would also be his legacy! He would do almost anything to protect it.
The price of a share is a balance between demand and supply. If we consider that DP would not sell his quota, 1/4 of the total share volume outside his grasp (Including the private placement) is already sold. Thus the stage is set for demand to push the share up.
This might not happen in the near future as the curtain (Market sentiment) is down. However large institutions are collecting this share (Notice that DP has bought only 1 million of this and the rest of the Rs 1.6 billion in sales up to now is definitely not retail interest.)
Usually a valuable share goes back up after 50% of its IPO number is sold. (See LGL, VFIN etc) In the ones that this does not happen, the big players - those who got the shares at a discount are selling. (Eg FLCH/ EXPO) Note that compared to what KD holds, what is held by the others is negligible. So this is actually a low liquidity stick in a relative sense.
If the market picks up, one of the first to shoot might be be VONE. This may be the chance of a lifetime, to buy shares one of the major holding companies at close to IPO price. (Just imagine if you are allowed to buy JKH, LCEY, CFLB, BUKI, SPEN at par now.)
The whole market may not shoot up or reverse in the immediate future due to low liquidity in the market from an outflow of funds. Therefore crap would not reach the moon and sustain the price. However if you look to the future and think about growth of the company, and do not invest with credit, every time KD makes money, you make money by a similar percentage. If one looks at the earning pattern of KD, there is exponential growth and I cannot see any reason why this should not continue.
If someone was to give me the opportunity to do nothing but watch TV for the rest of my life and earn a growth in my capital similar to KD for the next 20 years, and there is a reasonable guarantee of credibility, I would grab it with both arms.
If one is looking for a quick buck – like 20 percent in a day or week, this may not be the share as there is a huge volume in the hands of short term gain seekers. However 50K shares of this may easily pay for my daughter’s dowry house in Colombo 07 in 20 years.
The question is whether one is a trader, gambler or an investor. Remember 80% of all traders lose money! Price usually follows growth unless there is a good reason.
The trick is when to buy. No one likes to see the price of a share plummet right after he/she buys the share. So you also need to look at the technical side of trading. The best would be to make a small buy once the tide changes and then add more as the price rises in your direction. (Pyramiding up) Never pyramid down for your heart's sake. As someone once said, "The first and the last 1/8 is the costliest in the market”
The only counter argument is whether KD would dump his shares on the market – He cannot unless retailers are going to cough up 30 billion in a day. He cannot sell shares without declaring. If he does sell any and declares, there would be a guaranteed drop in the price the next day preventing him from selling the rest of the company. (Thankfully this is not like reef where he could pump and dump!) Besides, even if he does sell his shares in his holding company – what is he going to do for the rest of his life? He is rich enough already and prestige is what people live and kill for at that stage! Looks like Mr KD is in a catch 22 situation.
Once again please do not jump in and buy without considering the pros and cons on your own. That would be no different to how a Chimp behaves and is a sure path to poverty!
The price of a share is a balance between demand and supply. If we consider that DP would not sell his quota, 1/4 of the total share volume outside his grasp (Including the private placement) is already sold. Thus the stage is set for demand to push the share up.
This might not happen in the near future as the curtain (Market sentiment) is down. However large institutions are collecting this share (Notice that DP has bought only 1 million of this and the rest of the Rs 1.6 billion in sales up to now is definitely not retail interest.)
Usually a valuable share goes back up after 50% of its IPO number is sold. (See LGL, VFIN etc) In the ones that this does not happen, the big players - those who got the shares at a discount are selling. (Eg FLCH/ EXPO) Note that compared to what KD holds, what is held by the others is negligible. So this is actually a low liquidity stick in a relative sense.
If the market picks up, one of the first to shoot might be be VONE. This may be the chance of a lifetime, to buy shares one of the major holding companies at close to IPO price. (Just imagine if you are allowed to buy JKH, LCEY, CFLB, BUKI, SPEN at par now.)
The whole market may not shoot up or reverse in the immediate future due to low liquidity in the market from an outflow of funds. Therefore crap would not reach the moon and sustain the price. However if you look to the future and think about growth of the company, and do not invest with credit, every time KD makes money, you make money by a similar percentage. If one looks at the earning pattern of KD, there is exponential growth and I cannot see any reason why this should not continue.
If someone was to give me the opportunity to do nothing but watch TV for the rest of my life and earn a growth in my capital similar to KD for the next 20 years, and there is a reasonable guarantee of credibility, I would grab it with both arms.
If one is looking for a quick buck – like 20 percent in a day or week, this may not be the share as there is a huge volume in the hands of short term gain seekers. However 50K shares of this may easily pay for my daughter’s dowry house in Colombo 07 in 20 years.
The question is whether one is a trader, gambler or an investor. Remember 80% of all traders lose money! Price usually follows growth unless there is a good reason.
The trick is when to buy. No one likes to see the price of a share plummet right after he/she buys the share. So you also need to look at the technical side of trading. The best would be to make a small buy once the tide changes and then add more as the price rises in your direction. (Pyramiding up) Never pyramid down for your heart's sake. As someone once said, "The first and the last 1/8 is the costliest in the market”
The only counter argument is whether KD would dump his shares on the market – He cannot unless retailers are going to cough up 30 billion in a day. He cannot sell shares without declaring. If he does sell any and declares, there would be a guaranteed drop in the price the next day preventing him from selling the rest of the company. (Thankfully this is not like reef where he could pump and dump!) Besides, even if he does sell his shares in his holding company – what is he going to do for the rest of his life? He is rich enough already and prestige is what people live and kill for at that stage! Looks like Mr KD is in a catch 22 situation.
Once again please do not jump in and buy without considering the pros and cons on your own. That would be no different to how a Chimp behaves and is a sure path to poverty!
Last edited by prasrod on Mon Jul 11, 2011 11:33 pm; edited 1 time in total (Reason for editing : Error in Privately placed and IPO volume corrected.)
