Thursday, July 7, 2016

Ellipsiz Ltd - A Low Ball Offer From CEO

Updated on 8/7/16: As pointed out by respective valuebuddies (sgpunter), "...the Offer is not made by the CEO but the substantial shareholder Bevrian Pte Ltd which is an entity linked to the Lum family...This Offer was only triggered as it is mandatory to do so according to the Code of Takeovers and Mergers given that Bevrian has crossed the 30% threshold...Hence, the explanation for the seemingly "lowball" Offer. Bevrian already indicated that they intend to maintain the listing status of Ellipsiz so nobody is expecting for this Offer to go through..."

I just like to give a short update on Ellipsiz Ltd.


As of today, there was a low ball offer of $0.380 from the CEO.

I have seem low ball offers of my watchlist stock, such as Zagro Asia Ltd, happened before and succeed. But this is my first opportunity of receiving a general offer and I am still excited (even if it is a low ball one).

Anyway I have written about Ellipsiz Ltd previously, which you can read about it.

So now I have 3 choices:

1. Yes, I will sell.
2. No and I will ignore.
3. Wait and see, hope for a higher offer.

To decide, I will based my decision on the Enhanced Triple S Scorecard (Do note that Ellipsiz Ltd remains one of the stocks that pass the Enhanced Triple S Scorecard):

Based on 3rd Quarter of FY 2016 results, we note that:

1. Net Current Asset Value is about $0.325 per share.
2. Discounted Net Asset Value is about $0.531 per share.
3. 80% of Equity is $0.589 per share.
4. Graham Number is $0.691 per share.

In Short

As per my above findings, I will be more willingly to release my shareholdings if the offer was closer to the discounted net asset value price, such as $0.500. Therefore, my decision is to wait and see. Hopefully, the CEO will release a much higher offer.


In addition, do note that full year financials of 2016 will be released soon, around 18 August 2016, and I am expecting a large dividend to be given out. The reason behind my view of a large dividend is to compensate the CEO in spending his money for this general offer. Let's hope my guess is correct on this!

Current Price: $0.380 as of 7 July 2016.

Please do your own due diligence before you invest in this stock.

Do note the author is vested in this stock/company at $0.300.

If you are thinking of looking at stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

For those who are interested to find similar quality under-valued stock, you can come and attend My 1st Sharing Session with T.U.B. I will only be sharing my Enhanced Triple S Scorecard then. If you are interested to attend, do not hesitate to contact me directly.

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