Tuesday, July 30, 2013

Building A Buy Case Ob Sona

I rarely speculate any counter nowadays. But this is a case which should not be missed. Correct me if the information is misleading or not accurate or not right.
By now, we shall all familiar with SPAC after the soaring of Hisbisucs and Cliq. SPAC is like a ATM company which you put money into the management hoping and prying hard they would buy a fantastic cash cow company. More or less like listed a venture capital company. Never like it and won't consider it at my first glance. But this case is slightly different for Sona for 2 reasons.
1 ) Big chunk of the IPO was subscribed by  the cornerstone investor namely RHB Investment Management Sdn Bhd, CIMB-Principal Asset Management Bhd and Kenanga Investors Bhd . It should take out some of the risk for the retailer like me has a bunch of professional filter the qualifying asset that Sona is going to buy. It does put some confidence in me on this counter.

2 ) The IPo price is 50 sen. In the coming 3 years, shall Sona does not bag any qualifying asset, 90% of the money must be refunded to the share holders. Theoretically, as long as the price below 0.45 ( being 90% of 0.50 ), it is actually in the money on that sense. I am not sure the 90% aforesaid is base on the 0.50 or the reference share price 0.425 on its debut yesterday. Please leave a comment should you know it for the sake of sharing. 

Bought the share after a few minutes of consideration. Wish me luck.

P/S : Funny thing about Sona-Wa. I have never seen a warrant trades at a discount to it's mother share. A huge discount actually. At the exercise price of 0.35 and the current price of 0.235 it is trading at 0.585 vs mother share of 0.425 at the time of writing. It is madness. This gap won't last long in my opinion it is either mother share do catch up or it's warrant would soon slide. Betting on mother will be  wiser for it's warrant doesn't offer much gearing. 

Happy Trading.