Tuesday, November 12, 2013

China VTM sold - loss taken

I have sold my shares in China VTM (HK:893). This has been a disappointing investment (to put it mildly) beginning with a small investment when the iron ore price was just beginning its slide and ending when I doubled my investment in an attempt to arbitrage the unsuccessful privatisation. While I remain mystified why anyone voted against the privatisation proposal, the fact is that it failed and the company's share price plummeted. Having spent more time than I should going through the company's financials, press releases (not many of use) and other public information, I concluded that I had very little understanding of the company's assets (mine life in particular) and that a dividend was unlikely. A strong balance sheet with plenty of cash were not enough to overcome these issues. The only two things that caused me to hesitate were (i) the upsurge in China's iron ore imports and (ii) the possibility that there will be another attempt to privatise the company in the future. In the end, I concluded that my money was better invested elsewhere - even if I am not sure what the "elsewhere" will be yet.

I sold at $1.18 taking a net loss of 39%.

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