In a casual discussion with my friends (Praveen, Pravin and Chaitanya Vasishtah), I said “I think it’s a good time to invest in Satyam Computers shares”. The value of the share was $1.65 or $1.70 at that moment. Praveen then said, “No dude think of some alternative energy company to invest. Thats a good industry right now”. I am not sure how much that decision would have paid off but had I taken the decision to invest in Satyam Computers, it would have been a whopping 200% profit. Thats the difference between a fearless entrepreneur (may be I should say investor) who takes the risk and a middle class mind who thinks but never does it, isn’t it?
Why did I think it was a good time to invest in SAY?
Satyam Computers (SAY) has been a lot in the news for wrong reasons, with the scam taking the top position hands down. In spite of all the news going around, I thought the share value was definitely undervalued at $1.65. Then the accqusition of a huge stake in Satyam Computers by Tech-Mahindra made my belief even stronger. The value of the share has increased from $1.65 or $1.70 to $6.15 in yesterday’s market. So, an investment of $1000 would have made you a profit of $2600 approximately. On this positive note I would like to say this is a good time to sell any of the Satyam (SAY) shares you currently own unless you are a long term investor.
Why is it a good time to sell Satyam Shares?
Satyam computers had not produced a fully audited financial statement after September, 2008. Then came the shocking news of Ramalinga Raju admitting the exaggeration of Satyam profits. Since then, the takeover by Tech-Mahindra and the commitment of the Indian Government to reinstate the Satyam brand value created positive vibes about the company. But for short term investors looking to make profits, I think right now is the time to sell the shares as there is a fully audited financial report due very shortly. There are also many legal issues that Satyam has to settle with couple of companies in US, couple in UK and now one very recently in Australia. Tech-Mahindra is confident that it can settle these off the court but all this would definitely impact the share and it would probably get the share value back down to $2 or $2.5 in couple of months. To add to all this L &T is ready to sell its 12% stake in Satyam computers if the regulators do not have any problems with that.
So if you are making good money with the Satyam share right now and only if you are satisfied and want to come out of the confusion “Should I sell? or Should I keep as the share might still go up?” I would say, its worth a risk to sell as you are already in profit. The share might go up a little in the coming days but you never know when it would go down too isn’t it?
Disclaimer: All the suggestions provided above are my observations and only my understanding of the stock market. I am neither a guru of the stock market nor am I a graduate in finance. I am just a ordinary engineer trying to understand the stock market and put my thoughts together in this blog. The predictions may be right or may be wrong. The decision to buy or sell the stocks subject to your own decision and I am in no way responsible or liable for any loses that you incur.
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Thanks,
Krishna Chaitanya Emani.
This is Chaitanya CRUISING your way. 