This post is NOT meant to be a "I told you so" kinda post.......
But for those that say that you couldn't have seen this coming, if management wanted to "cheat" you, no amt of DD helps etc....
well, sometimes it's true:
THIS is called cheating.
1 day the numbers are there, next day management literally disappeared with the money.
Many yrs later, still not caught, and hiding somewhere in the world with the hundreds of millions of dollars.
In Hyflux's case, nope, you could've seen it coming.
Yes, I ain't horse behind cannon.
TTI's horse was way in front of the cannon.
As a matter of fact, 18mths in front of cannon to be precise:
Reply to @xinglong : .973 is not very much lower than par value.
Considering the fact that Hyflux is in the red as of mrq, and in its balance sheet sits more than $1.1bil of non current loans and another $200mil of current loans, with cash of only $190mil, I'd say it doesn't look particularly low.
Besides an ugly balance sheet, the company also has negative operating cashflow for quite some time. They rely on refinancing, as well as the occasional divestment of JVs or subsidiaries for cash.
But if the debt markets suddenly dry up, and/or interest rate spikes up, their situation would be untenable.
You can buy high yield aka junk bonds at easily 50-60 cents on the dollar, so Hyflux's 0.973 doesn't seem particularly cheap to me."
But if u r a CPS holder n u see your coupon accumulated instead of distributed.... do u feel confident that they’d eventually pay it?
I would think that’s the 1st step to insolvency already"
Reply to @bgting : Yea the bonds r illiquid
Buying the CPS is v attractive if they can continue paying coupons
But what if they can’t?
It’d pretty much drop to 20cents in the dollar
I wouldn’t wanna risk it"
Well, those comments are about 1yr plus ago.
So you COULD see it coming, or at least, be unsure and stay away.
Even then, it seems I was too optimistic. It ain't 20 cents on the dollar. It's like 10 cents on the dollar now (with an uncertain 7 cents)
Here we are.
18 months later.
TTI's piece of genuine advice to stuck note holders now is...
take whatever you can, and move on.
OK, someone's certainly going to say "easy for you to say la, it's not your money! Go and die la you!"
This means you have not read the earlier post. So I shall paste it here again.
THAT's what a genuine con job looks ike.
I wrote it off immediately, all $30k SGD of it, and moved on.
The realm of investing has no room for emotion.
Anger & Regret do not help in decision making.
Praying is not investing.
Protesting is not investing.
Getting back 10 cents on the dollar is better than 3 cents, which is better than 0 cents.
But ah well.
Nobody ever listens to TTI anyway, so do what you will.