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Book value at $650 million and sold at $430 million, that is a whopping discount of 34%.
Either it is a fire sale or the valuation is out of whack, or both.
And it's difficult to see how the disposal benefits the shareholders.
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(17-07-2020, 04:17 PM)Shiyi Wrote: Book value at $650 million and sold at $430 million, that is a whopping discount of 34%.
Either it is a fire sale or the valuation is out of whack, or both.
And it's difficult to see how the disposal benefits the shareholders.
OUE values its investment properties based on fair value accounting, ie. they will hire "independent" external valuers to determine this book value.
But of course, book value as per independent valuer and market value as per buyer are 2 different
tings.
This is also probably why we seldom see any listed companies that uses fair value accounting, having their prices trade close to their book value (with the exception of some miracle REITs but it is mainly driven by the market loving the "predictable income" that is largely distributed as dividends). Most of these fair value accounting companies are always at a discount to NAV. This probably provide some clues whether for this situation, on whether it is a fire sale or the valuation is out of whack, or both.
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Valuation are opinions. Can pick and choose for whatever purpose you want it to be.
Eg. Get a loan, valuation as high as possible. Pay taxes, as low as possible.
Just shop around. Just like IFA shopping.
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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Interesting, another offer from a company to minority shareholders to exit investments, this time it is OUE, a good analysis from Dr Wealth on whether it makes sense to exit,
https://www.drwealth.com/oue-stock-jumpe...ders-sell/
The original SGX link announcement is here,
https://links.sgx.com/FileOpen/OUE_Annou...eID=803948
Per se, while it does not really look like a fair or reasonable offer, in some ways, if one has been stuck with OUE for a long time, I can understand the temptation to call it quits as minority shareholder,
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I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.
Nothing written here is an invitation to buy or sell any particular stock.
At most, I am handing out an educated guess as to what the markets may do.
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(22-05-2024, 12:47 PM)Shrivathsa Wrote: in some ways, if one has been stuck with OUE for a long time, I can understand the temptation to call it quits as minority shareholder,
hi Shrivathsa,
Since OUE is listed, all an OPMI needs to do - is to sell their shares on the open market whenever it is open from 9am-5pm on weekdays (Except public holidays). So why would one "be stuck with OUE for a long time"?
Of course, that is unless you are some closed end fund whom is owned by the same ultimate owner of OUE..
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