Tuesday, May 13, 2008
Electric Power Development (#9513): A Synopsis
Some things are simpler to understand than others. Be that as it may, some activists seem to have difficulties comprehending even the most overtly simple of concepts. But then there are always some people that must learn the hard way.
* TCI ostensibly thought Elect Power Dev was "Cheap" and ripe.
* So did I, and thus, I bought some.
* And TCI bought some too. (Lots more than me)
* And TCI bought more.
* In the process, TCI ramped the price.
* So I sold my stock to TCI (TYVM!)
* TCI collected huge Perf Fees as a result of this ramp. TY (investors) VM.
* After the buy & ramp, they made some noise (as activists do).Something to do with investing less and paying shareholders more.
* I shorted some stock for the fun of it.
* TCI were told by Mgmt (and 2-in-3 shareholders) in no polite terms to "Fuck to the fuck Off". Ok maybe it wasn't that impolite (but it well could have been).
* TCI subsequently lost lots of mark-to-market money as 9513 fell ~50% and underperformed TOPIX by 33%.
* I bought my short back. TYVM.
* TCI didn't have to return to their investors, any of their perf fees formerly earned.
* TCI still had their [large] position so made more noise, this time pitching investors on the benefits of something they called "MAXIMIZE VALUE VIA EFFICIENT CAPITAL STRUCTURES". Errrr ... In other words: "Cut investment. Leverage-up. And pay us more dividends".
* Elec Power Dev Board said in a Press Release: "The last time we checked WE were the management, and YOU were the shareholders. IF YOU want to be the MANAGEMENT, Then YOU must BUY the MAJORITY.
* TCI accepted their dare, and said they would like to buy more.
* This may have been a ploy, but at less than YEN4000/share (5% earnings yield) and nearZIRP YEN rates, this perhaps was sincere.
* 9513 only has a YEN600bn market cap, so this remained plausible given TCI's apparent AUM.
* A plan was hatched by TeamJapan to win, once and for all.
* MoF and MITI said: "We are GOD. You are NOT. You are not welcome here. Now Fuck the fuck off"
* TCI now has a very large and less-than-marketable position in 9513, with no immediate exit.
The moral? Do not tug on Superman's cape, Do not piss into the wind, Do not fuck with the people that make the rules unless (a) you've already made enough money, (b) you have a good "Plan B" (e.g. compromising pictures of important Ministers with, for example, Spitzer's ho') or (c) it's not your money.