China Mobile plays bad green shoe mechanic!
Today’s market decline is very tragic, in all the concept plate, only the hotel catering plate up 0.95%, the rest of the business related concept plate are down.The biggest fallers were in the concept sector cloud Gaming, which fell 7.2 per cent overall, and Bytedance, which fell 6 per cent, while more than 50 sectors related to media, fintech and other concepts fell 5 per cent or more.Statistics show that today, A total of 4332 stocks fell, the highest number of stocks fell in the history of A share!But it is very surprising that China Mobile, a large-cap stock in today’s ipo price or stubbornly defended.The lowest price of the stock today is 57.59 yuan, one cent higher than the issue price of 57.58 yuan, especially in the afternoon after the opening, the stock fell from 57.79 yuan all the way, but after falling to 57.59 yuan, the share price chart on the timeshare chart went to the horizontal line, 15 minutes before the closing was pulled, but finally was sold down.It closed at 57.59 yuan, one cent above its offering price.On the surface, on the evening of January 23, China Mobile Group, the actual controller of China Mobile, offered A share increase plan of 3 billion to 5 billion yuan: the implementation period of this plan is from January 21 to December 31, 2022;The company said it would “act as appropriate” based on the volatility of its stock price and overall capital market trends.In fact, On January 21, China Mobile Group increased its holding of 12,320,200 A-shares of China Mobile, amounting to 710 million yuan, or about 0.058% of the company’s total issued shares (the same below before exercising the overallotment option).After this increase, China Mobile Group holds 69.895% of the total issued shares of the company.On January 5, China Mobile, one of the country’s three largest operators, officially returned to China, raising 48.7 billion yuan.But in the secondary market, China Mobile has repeatedly approached the break-line since its listing.From the wearing of “green shoes”, H share repurchase, real controller increase and other practical actions, the company has begun to break the “defensive battle”.But whether buying back H-shares or A-shares, these practices greatly hurt the rights and interests of a-share subscribers.Why does the buyback of H shares damage the rights and interests of A share subscribers, I in the previous article “green shoe mechanism why no brain protection plate?”It’s already been analyzed. It’s suspected of using money from people who eat vegetables to subsidize people who eat abalone.And why does A share repurchase also damage the rights and interests of A share subscribers?So let’s analyze it.Estimates that A lot of small and medium-sized retail investors had hardly see China mobile this increase announcement is gratified, after all in the new type after signing doesn’t sell, you also don’t want it breaks down, but the A share buyback plan is, in fact, no sincerity, simple compare it to repurchase H shares solution we can see:After 48.7 billion YUAN of a-share financing was received, China Mobile immediately announced that it would spend nearly 100 billion Hong Kong dollars to repurchase H shares, which is equivalent to more than 84 billion YUAN. However, the money he spent to repurchase A-shares was only less than 5 billion yuan!The amount is 1/17 of H shares, so it can be seen that his sincerity on the buyback of A shares is completely inadequate.What’s more, the maximum 5 billion yuan will be used in about 50 weeks of this year, with an average of 100 million yuan a week. Compared with its market value of about 50 billion yuan, the minimum trading volume of 1 billion yuan a day is only a drop in the bucket.But this is not the core of the problem, the core of the problem is that China Mobile through the issuance of measures at this time, it is likely to ensure that his share price does not fall below the issue price, so that he can get the overallotment under the green shoe mechanism!Even if he could raise more money himself!As we all know, in order for listed companies to achieve overallotment, under the green shoe mechanism, they must ensure that the stock price does not fall below the issue price within one month after listing.Or can say, share price even fell below issue price, but, as long as be in fall below issue price clinch a deal the quantity is under its predetermined issue 15%, so appear on the market the company is likely to send more a few stocks, many circle a few money come back.According to this calculation, If China Mobile maintains its ipo price, it can issue another 15% of its shares, at 57.58 yuan per share, so it can make more than 4 billion yuan.That means China Mobile is using investors’ money in the secondary market to keep the share price from falling below the offering price to achieve its goal of overissuing shares.The true realization of fame and fortune: the stock did not break hair, financing all hand.If you end up spending only $3 billion to increase your holdings, you could have saved $1 billion more to do something else.However, for the investors who subscribe for China Mobile A-shares, the 1 billion yuan before the green shoes buy 100 million shares, while the 1 billion yuan after the green shoes corresponds to 115 million shares, so the price of each share is unconsciously diluted, and the final break is inevitable.What’s more, the 48.7 billion yuan that China Mobile has invested in A-shares is less than half of what it has spent to buy back shares in the two markets.So why does China Mobile need financing after all?The real purpose of his equity financing has become the buyback of part of the equity, which is not slippery world of great kei?In addition, we can see that there are two more problems:Is a very good in the world to protect the interests of small and medium-sized investors to play new green shoes mechanism, is the practice of this period can increase to play a bad, in so doing, makes the mechanism completely lost due to protect the role of new applicants, if stock was break, should is the result of a public market transactions, but now in this within a month,That is, the listed company is allowed to use the raised funds to increase its holdings of shares within the date when the overallotment right is decided to be exercisable. As a result, the trend of a month after the ipo cannot fully reflect the real will of the market.To some extent, the stock price has been manipulated by the listing, or there is a good chance that the stock price is manipulated by the listed company and is unlikely to break.It also means that the green shoe system is officially bankrupt in China.On the other hand, this case also reminds us why the majority of small and medium investors brainlessly new is wrong?That’s because there are only possible short-term benefits: you win a deal, the share price goes up, which can make up for some losses on your account, but in the long run, more and more companies go public, and the delisting mechanism is not smooth, which is sure to dilute the returns of every investor in the market.Encounter a few drill policy loopholes listed companies, small and medium investors escape the fate of losses!This goes to investors how to deal with short-term interests and long-term interests of a very important decision point, if in order to protect their own long-term interests, investors should not engage in any one no brain dozen new, if new shares difficult, or even send out, over a period of time to stop it completely, then the secondary market investors have a chance to recuperate, restore vitality.Otherwise, the value of investors’ shares will continue to fall in constant dilution.Before my friend recommended to read a book called life at 100 years old, which analyzed why some people always attach great importance to short-term interests rather than long-term interests.It’s probably because the ancestors of these people had a very short life span, so in a limited time, let’s say 20 days, 30 days, then of course he’s going to choose the short-term decision to make a little bit of money as soon as possible, regardless of 10 years, 20 years from now, because he’s not going to live that long.As Keynes said, the long run?Long time we’re all dead!But are we going to be so shortsighted now that we’re increasing life expectancy by two or three years every decade?Will we be able to ignore our long-term interests as before?Of course, I can’t stop you from trying something new without thinking. I’m just glad my ancestors had longevity genes!