An unexpected catalyst for Consciencefood

My timing in selling my position in Consciencefood has been unfortunate because a day after selling my shares the company announced that the CEO intents to take the company private: offering exiting shareholders $0.184 per share. So I guess that my concerns about the company were probably for a large part unfounded, but at the same time it also illustrates one of the bigger risks you face as a value investor. The value might have been there, but if the company can be bought at a 23.5% premium you still miss most of the upside, and everybody who didn’t buy recently gets a break-even result at best.

Obviously it’s not a done deal yet, so it will be interesting to see how this is going to unfold. It wouldn’t surprise me if shareholders are happy to be able to exit a poorly performing investment at a small premium, but at the same time the offer price is below the recent IPO price which will make it tougher sell. I’m not a shareholder anymore, but in my opinion the CEO is trying to steal the company with a low-ball offer here.

Disclosure

No position in Consciencefood

7 thoughts on “An unexpected catalyst for Consciencefood

  1. luckyscum

    but…but… all those wealthy connected locals who bought in at the IPO…. 🙂
    when ppl start counting your trucks, it’s time to go dark I guess.

    Reply
  2. NeverLoseMoney

    Very unlucky with the timing. 🙁
    I hope for the shareholders that this proposal will be voted down. The picture should look quite different 1-2 years from now, when the factory fire is all behind them and with the introduction of the beverages. I agree with you: the CEO is using this short time window to capture the upside for himself.

    Reply
  3. Lampaji

    dear Sgx.

    Is good news for sgx did not protect share holders interest.
    This coporate exercise is typical “cross the brige then pull brige”!~!~ It just 3 yrs IPO! With NTA 23cts!! Cash about Sgd$50M!! Now want delist?!! Diu nia ma ka chao hai!!
    Will work out a complete detail and circulate it out to all the stock exchange around the world.
    SGX DID NOT PROTECT shasholders interest!!

    Reply
  4. blue

    Minority shareholders will ultimately be forced to go along with the delisting. It is very saddening.

    Agreed with lanpaji. Sibeisian

    Reply

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