Sharemarket Shennanigans

[Davo36]

I have been looking at buying shares recently. Still don't know much about it, but look at this article:

http://www.stuff.co.nz/business/2299...-issue-rip-off

There's obviously mum and dad investors and then the guys who make all the money. And they are distinct groups.

David

[outspoken]

Yeah, I read that too, and did some more digging. What they did is completely legal, but the consensus is that it was a rip-off morally and ethically.

The point, from what I could gather is: The Board of Nuplex failed in their duty to adhere to their banking covenents and got taken advantage of big time because of their lack of action and understanding the ramifications.

And, as usual, the retail investors (Mum & Dad) got the short end of the stick!

[Wayne]

I wonder if the small shareholders could get together and take the board to court for not protecting their interests? Probably could but unlikely to get them organised.

[Green Fish]

The main issue here is the role played by First NZ Capital.

Putting that issue to one side, the small Mum & Dad investors tend to sit on their hands when a public company needs capital, so you can hardly blame Nuplex for trying to sweeten the deal for the major shareholders. The company needed capital, and it needed it fast.

I wouldn't be put off shares as a result of Nuplex (not so Feltex). The sharemarket will turn the corner long before the property market.

[Perry]

Isn't the 'defining' issue with shares (vs property)
that one has little if any control over what goes on
and nothing more than a piece of paper in exchange
for all one's hard-earned dough?

And doesn't the way the so-called Mum & Dad investors
get the bum deal (with shares) just go to prove that?
Possibly a bit of an over-generalisation, but . . .

[outspoken]

Well yes, the defining issue is (like you say) 'control'
You can do all the research in the World and find a good Co to invest in, but unless you own more than 50% of it, you dont have control & it only takes one bum decision by a Board or Directors to ruin the Co.
You're taking as much risk with the business that the company is in as the way it is run by it's Directors.

One could argue that Property is under the influence of the economy, but at least you have control over how you run 'your' company and (mostly) the factors are in your 'control'

[Davo36]

Yeah I agree with this. You hand over your money and hope the management continue to do a good job.

GF, yes the financial institutions made money because they stepped up with the funds when needed. But I'm sure if mum and dad investors were told about this sort of deal and given the opportunity to participate they would have. But that would have been too much hassle and taken too much time I imagine.

I find the lack of control with shares a bit of a worry personally. You are basically buying and hoping the price goes up. You may be able to indentify reasons why the company should do well etc. but those things may or may not eventuate.

The bigger investors like Buffet are on the inside of these sorts of dealings. And when buy companies they buy big chunks (or the whole company) and have a lot of control. They are basically buying and running businesses, not just buying shares.

David

[BlueSky]

who gets the news first if there is impending takeover bid, obviously its the companies(s) involved, the NZX , brokers and then the punters.

So unless you hold the stock already, you will not know until its all over as far as the buy/trade opportunity goes?.

[PTWhatAGreatForum]

I have been looking at buying shares recently. Still don't know much about it, but look at this article:

Repeat after me:
"The New Zealand share market is a transfer of wealth from the investors to the company directors"...

Look at a few companies there and you will quickly see what I mean...

[Perry]

So keep looking, David. Looking & looking
and leaving your money in your pocket.

[BlueSky]

I see Nuplex and Digilent share prices have shot up.

Is there anyway I can get a headsup or is it always after the fact. I know there is a disclosure to NZX but who else ?

[Wayne]

I see Nuplex and Digilent share prices have shot up.

Is there anyway I can get a headsup or is it always after the fact. I know there is a disclosure to NZX but who else ?

That's it - continuous disclosure.
Anything else would be insider trading.

[BlueSky]

I heard it on Monday midday but by then it shot by 30%, too late so I guess what I am asking is how to get news of any major changes, takeover etc

[Wayne]

NPX announced to the NZSX at 8:48 am
So if you kept across the NZSX website you would get them as they come in.
If you want to do it that quick then do it full time!