Olam -- sell

Company raising money is only survivor move because of high leverage. It will counter short sellers only. I believe share price recovery is only temporary. It's time for the company to consolidate their business.

Can I ask an honest question?
The CEO buys 1m shares in open market on Friday, then Temasek announced this new investment in Olam on Monday.
Does this mean the CEO commit insider trading?
What is the borders that the CEO can buy shares and not be considered insider trading?
Thanks for your enlightening in advance.
 
 

One year's high is about $3.20, 8 months is $2.7. recent six months high $2.00.
Who in the right mind to short at $1.55? MW plans this at least one and half years ago. Anyway $2 to $1.5 25% within 1 month also not bad.
No more scrips in the market. All out, not surprised that insiders also shorted, then buy to cover back, or subscribe the rights to cover back.
Stock market is not so clean as everyone thinks.

My take, Physical Agro trading is capital intensive one. One thing for sure they trade in too many commodities. Just like the stock trader, how on earth one is going to monitor 20 stocks? Yet want to trade the physical market, futures, CFDs, options on all these 20 counters? Vertical and horizontal integrations are good , if they owns the farm in the first place. Trading makes less, owning the processing will add some value. However, who really make the most money in this chain of commodities? Actually it is still the land owner. If they own land to grow not more than 5 crops, they process them and sell them, it is a great business. They will make good money,

Just for info...Olam's latest maneuver rings a bell to the tactic that HSBC deployed at the height of the financial crisis back in Mar '09. HSBC was then under attack by short sellers, who drove down its share price by 24% in a single day. This was despite HSBC launching an attractively priced rights issue to raise US$17.7b. Nevertheless, the bank pressed on with its cash call, confident that its vast legion of shareholders would stay loyal and lend it support when it was needed most. It was a daring gamble that paid off, as the bank's share price made a V-shaped recovery.
This forced investors who had lent out their shares to the short sellers to recal them to subscribe to the rights issue, or face a big dilution to their shareholdings. Well Done!

 
SINGAPORE, Dec 4 (Reuters) - Short-seller Muddy Waters said on Tuesday that Olam International Ltd's "180-degree reversal" on tapping the markets validates its thesis that the Singapore commodities trader is in danger of failing, and it maintained its "strong sell" view.
"Only four days ago, (Olam CEO) Mr. (Sunny) Verghese vehemently insisted that it would not tap the markets for at least five months. This 180-degree reversal supports our thesis that the company was in dire straits over the weekend," Muddy Waters said in an e-mailed statement.
Verghese told Reuters in an interview last week that Olam had sufficient cash and did not expect to tap the debt markets for at least five to six months.
Olam said on Monday it is issuing $750 million of 6.75 percent five-year bonds at a price of 95 percent.
The bonds have warrants attached that will allow holders to buy a total of 387 million shares at $1.291, which would raise $500 million if they were all exercised.
The issue is backed by Singapore state investor Temasek Holdings Pte Ltd, which has a 16 percent stake in Olam. (Reporting by Eveline Danubrata; Editing by Edmund Klamann)