How bad is BAD?
Amidst the earnings season and the likely increase in companies having share placements, how literally should investors take the company's word for it?
Earnings seasons comes once in three months --- for some, once in six months. Companies will then have to declare its revenue, profit numbers, cashflow, dividends and a few other pointers. It is the company's responsibility to inform shareholders about the liquidity of the company for that period.
They have a certain dateline and the information would have to be posted up on the Singapore Exchange, the one and only stock exchange moderator in Singapore. Companies who fail to meet the dateline would have to request and make a public announcement to post its earnings on another date.
But what really irks me is when companies keep postponing the date to release its earnings.
The companies of course, do have to state its reason for doing so. For example, like when new purchases took place and the numbers have not been added/audited into the earnings' statement, or that the latter date is a better reflection of the companies' performance.
Generally, investors do not really care! What they want is honesty from the companies where they put their money into, regardless if the numbers are good or bad. Be it the additional figures are added now or later, it would still be added anyway. The only difference would be the quarter in which that information is being added in.
Investors want to see the comparison between this quarter and the same time in the previous year, and some bluntness here might actually boost investors' confidence and belief in the company.
Share placement exercise is another pointer. While it does not happen all the time, I feel it is still worth pointing out and take note of such happenings.
Companies do share placement exercise to get more cash for the cash company. Essentially what it means is that the company is issuing more shares for more money. Of course, they will announce how much it expects to get and what it is going to use it for.
However there are times where companies, after it gets its proceeds from the share placement, it announces that instead of using it to invest in whatever they initially said the money is going for, it will be using the money for another thing.
An example is Alantac Technology where in August this year, after getting money from the proceeds, it says that it will 're-allocate' about S$5.0 mln to buy equipment in place of expanding its facilities. So investors who initially put in their money in hopes of facilitating the companies' expansion, are sort of 'being cheated' as it would in the end be used for another purpose.
These are just some examples. So really, how literally should investors take companies' word for it?
Comments? Bring it on!
Nurwidya Abdul
ArchivesEarnings seasons comes once in three months --- for some, once in six months. Companies will then have to declare its revenue, profit numbers, cashflow, dividends and a few other pointers. It is the company's responsibility to inform shareholders about the liquidity of the company for that period.
They have a certain dateline and the information would have to be posted up on the Singapore Exchange, the one and only stock exchange moderator in Singapore. Companies who fail to meet the dateline would have to request and make a public announcement to post its earnings on another date.
But what really irks me is when companies keep postponing the date to release its earnings.
The companies of course, do have to state its reason for doing so. For example, like when new purchases took place and the numbers have not been added/audited into the earnings' statement, or that the latter date is a better reflection of the companies' performance.
Generally, investors do not really care! What they want is honesty from the companies where they put their money into, regardless if the numbers are good or bad. Be it the additional figures are added now or later, it would still be added anyway. The only difference would be the quarter in which that information is being added in.
Investors want to see the comparison between this quarter and the same time in the previous year, and some bluntness here might actually boost investors' confidence and belief in the company.
Share placement exercise is another pointer. While it does not happen all the time, I feel it is still worth pointing out and take note of such happenings.
Companies do share placement exercise to get more cash for the cash company. Essentially what it means is that the company is issuing more shares for more money. Of course, they will announce how much it expects to get and what it is going to use it for.
However there are times where companies, after it gets its proceeds from the share placement, it announces that instead of using it to invest in whatever they initially said the money is going for, it will be using the money for another thing.
An example is Alantac Technology where in August this year, after getting money from the proceeds, it says that it will 're-allocate' about S$5.0 mln to buy equipment in place of expanding its facilities. So investors who initially put in their money in hopes of facilitating the companies' expansion, are sort of 'being cheated' as it would in the end be used for another purpose.
These are just some examples. So really, how literally should investors take companies' word for it?
Comments? Bring it on!
Nurwidya Abdul
Labels: Alantac Technology, earnings season, nvestor Central, share placement, Singapore Exchange
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