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Confidence is always the bane of debt issuers. Applies to both countries and companies alike.
A company without debt cannot go insolvent overnight. Simple truth yet difficult to see amidst the finance jargons
Essentially MW is saying the same thing: the money raised for higher working capital in 2008 onwards "disappeared", not withstanding that bio asset reval under Singapore GAAP is really lousy idea.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Think Asset-Business-Structure (ABS)
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Only when the tide goes out will we know who is swimming naked - WB
Similarly, only when the creditors start asking questions and refusing to commit more $$ to olam will we know how good the company is.
There are no good stocks. Stocks are only good when they go up after you bought them.
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There is little doubt CEO Sunny Verghese has been effective in charting Olam's growth since even before the company's IPO in Feb05, and in getting bankers - including many inexperienced, impressionable, or silly ones - to buy into the growth story of this over-sized agri-commodity house, but does the man have the experience and ability in managing a potential financial crisis/squeeze in Olam when many lenders, creditors and trade counterparties start to withdraw from the company to take cover for safety? I suppose we can only know with time.....
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(27-11-2012, 06:49 PM)dydx Wrote: There is little doubt CEO Sunny Verghese has been effective in charting Olam's growth since even before the company's IPO in Feb05, and in getting bankers - including many inexperienced, impressionable, or silly ones - to buy into the growth story of this over-sized agri-commodity house, but does the man have the experience and ability in managing a potential financial crisis/squeeze in Olam when many lenders, creditors and trade counterparties start to withdraw from the company to take cover for safety? I suppose we can only know with time.....
Just trying to play Devils Advocate here to what you said - why should the bankers and lenders pull out support for Olam without good reason, and unless there was really something materially problematic about its business? Granted once such an event occurs it would result in a "snowball" effect, but then again - could this Muddy Waters report really be the catalyst for that to happen? 
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27-11-2012, 07:00 PM
(This post was last modified: 27-11-2012, 07:01 PM by corydorus.)
The key is whether the business is viable or not. Got backing or not is not the issue. No one with the right mind will throw away money.
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(27-04-2012, 07:09 PM)Some-one Wrote: To be frank, I am worried about people buying into Olam. They keep on buying and buying other companies. What do they want to do? By buying and buying, they would keep on incurring expenses and as a result, they carry with them huge debt. I seriously think they should just focus on a few good business and grow it, instead of growing by Merger and Acquisiton (M&A).
Well well well, it looks like my greatest fear that I have posted in April is coming true.... 
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27-11-2012, 08:22 PM
(This post was last modified: 27-11-2012, 09:45 PM by Stocker.)
CEO Sunny Verghese in today's ST said Olam is the target of short sellers because of its high borrowings.
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27-11-2012, 09:51 PM
(This post was last modified: 27-11-2012, 09:55 PM by money.)
(27-11-2012, 06:56 PM)Musicwhiz Wrote: (27-11-2012, 06:49 PM)dydx Wrote: There is little doubt CEO Sunny Verghese has been effective in charting Olam's growth since even before the company's IPO in Feb05, and in getting bankers - including many inexperienced, impressionable, or silly ones - to buy into the growth story of this over-sized agri-commodity house, but does the man have the experience and ability in managing a potential financial crisis/squeeze in Olam when many lenders, creditors and trade counterparties start to withdraw from the company to take cover for safety? I suppose we can only know with time.....
Just trying to play Devils Advocate here to what you said - why should the bankers and lenders pull out support for Olam without good reason, and unless there was really something materially problematic about its business? Granted once such an event occurs it would result in a "snowball" effect, but then again - could this Muddy Waters report really be the catalyst for that to happen?
the recent global recession was caused by stupid bankers who made dumb loans to buy houses... dont be suprised should the bankers of olam make the same mistake, well olam doesnt buy houses but they buy plantations, etc
haha i was just thinking if noble will be implicated by olam, if people cant borrow shares to short olam, will they short noble as a substitute
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Will the next crisis be caused by commodity ....?
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(27-11-2012, 05:03 PM)Musicwhiz Wrote: Seeing how the share price was hammered today, perhaps Olam will come up with yet another spirited defence? 
Damage is done already. Investor confidence is badly shaken. Bankers are worried. There will be a downgrade by the analysts and rating agencies. A vicious circle in a downward spiral sets in and it will be self fulfilling. Investors will rush out first and ask questions later- herd instinct...or has this already happened. The CEO will have to pull a rabbit out of the hat, and pretty soon too....many are hoping. A protracted court case is going to further drain resources and is never good for a company, regardless of whether it is the plaintiff or the defendant.
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