Hi, Can anyone tell me if these were goods buys. As of yesterday the purchases made we 25 shares in Softbank Corp ($40) and 30 shares in Tencent Holdings Ltd ($58.25). Feel confident that Tencent will grow but now sure about Softbank. Any ideas. Alex
I am also interested in Tencent. But there is a serious problem with this stock. Tencent is traded on the Pink Sheets (penny stock). I believe the reason for this is that Tencent does not want the Wall Street Crowd to have the power to control the share price (i.e. shorting the stock, selling off in response to negative press and so on). Tencent is far too large and profitable to be a penny stock. That is why there listing reads: "Tencent Holdings Limited Unsponsored ADR Representing B Shares Cayman Islands". This is a subsidiary of Tencent and the stock will likely not reflect the actual gains or losses that you will see in the Shanghai index. It is listed because Tencent could not pass up the opportunity to make money selling shares. But the company does not want investors dictating the value of the stock. Nintendo did the same thing when it listed itself on the Pink Sheets. One share of Nintendo's penny stock is equal to 1/8 of a share of the Nintendo stock that trades in Tokyo. I would love if other can comment on whether or not I have this right. Thanks,
Do you have a link to share price graphs for these companies so that we can see how they have performed recently? I am a little confused about this comment in your post:- "the company does not want investors dictating the value of the stock" That is what a stockmarket listing is all about surely - an information exchange? Investors buying and selling and the share price finding its own natural level? If a company was not prepared for this scenario then is there really any point in listing - should they not stay private?
Yes you are correct in asking this question. The company wants to sell shares because it knows so many people will buy it and thus it must list the company because there is so much money on the table. However, the company(s) do not want to give Wall Street investors the power to control the value of the stock. This is true with Tencent, Nintendo and most notabley ARAMCO which plans to go public next year. A penny stock is established in two ways: The company is worth $250 million or less or the share price is valued at under $5.00 per share. Tencent fits in neither of these categories. Thus it should be listed on one of the three major exchanges in the US. They choose to create a subsidiary and list it. This way American investors do not get to control the share price of the parent company but Tencent still enjoys the income of selling shares. The Economist Magazine just had a special report about ARAMCO. The Saudis that control ARAMCO also want to enjoy the influx of cash from selling shares but they don't want to loose control of what "they think" is the correct valuation.
You now can buy Tencent all over again. The company will now be listed on a major exchange not the Pink Sheets. The new symbol is: TME.
