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*****py way to keep peace with market while major shareholder abandon ship (read: retires)

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CHATTYCHAT
Super Contributor
SSK - Stefanutti Stocks Holdings Limited - Dealings in securities by directors: The Board of Stefanutti Stocks has been cognizant of the lack of liquidity in the Company's shares since listing but had always decided to retain this status in the initial years of listing. With the maturity of the stock over time, management has in recent years conveyed their intention to improve the stock liquidity in the market. Accordingly founding shareholder Gino Stefanutti, and certain other directors of Stefanutti Stocks' including Willie Meyburgh, Dermot Quinn, Bridgman Sithole and Joseph Fizelle have today placed approximately 32,7 million Stefanutti Stocks shares with a major local institutional investor. Mr. Stefanutti's role as an executive director of Stefanutti Stocks changed to that of non-executive, with effect from 1 March 2010, whilst Mr. Meyburgh and Mr. Quinn have been CEO and CFO, respectively, since the group's listing in August 2007. Mr. Sithole has been a non-executive director since listing. "It is expected that this structured placement will go some way in addressing the issue of liquidity, whilst the shares sold by the executive directors of Stefanutti Stocks, represent only a small percentage of their entire shareholding", says Mr. Meyburgh. "We appreciate the vote of confidence from a major local institutional investor in the group, which at the same time assists us in our objective of improving liquidity in the stock." ...the following information is disclosed: Name of director: Biagino Stefanutti - (Chairman) Date of transaction: 12 July 2011 Price per share: R12.20 Number of shares: 26 330 000 Total value: R321 226 000
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21 REPLIES 21
THRESHOLD
Super Contributor
You don't find ASSORE, TRANSPACO, ELR, REX TRU, CARGO among others - tring to increase liquidity by flogging shares at the "bottom?" of their markets. AND SSK is a gushing trading river compared to these.
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Not applicable
there are 188m shares issued, he is a 25% shareholder. He has ditched 26m shares, that is almost 50% of his holdings. 26m shares doth not liquidity make!
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THRESHOLD
Super Contributor
YES - these liquidity stories - sounds like Purple Capital et al. If you were the director - with an intimate knowledge of the company; your own company - would you be selling? This comopany brought to market at the top of the cycle - to make money for its stakeholders. It looks like that didnt' work out and now they are happy to sell at 7x earnings - which would have been a stunning price if they had stayed private. All of this does not necessarily make this a bad company - it just irks me that we re sold this trite nonsense instead of the truth.
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prancing_horse
Super Contributor
Gino Stefanutti has been a person friend for almost 40 years, as we were in the same field when we started out (bridge building) even doing a jv together.Therefore I think I know a little more about the person and company as I also have a son-in law who Gino head hunted for years before joining SSK. Of course the reason for listing was to cash in his chips, I defy anyone in the same position to have done otherwise.Having no sons to pass the baton to, and not getting any younger, he is only doing what you and I would love to do, enjoy your twilight years after many years living on site in sheds and caravans in the 70's. From the start the shares were overpriced, something we spoke about often,but the market was hungry for anything, so feed it he did.The one proviso was he was not allowed to sell any large quantity of shares for 3 years from listing, that time is now up.I look forward to sharing a good bottle of red with him soon,and when I tell him he's abandoning ship he'll say "abandoning ship,your a...!!!!. he's a smart businessman, one of the best, and humble and a friend indeed.
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THRESHOLD
Super Contributor
So, at the end of the the day, you are saying that I am 100% correct. He tried to cash out by listing, waited a while (largely as a result of the resticive requirements of listing) and has now settled for the best he can get. Thank you!
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SimonPB
Valued Contributor
but there are only two reasons to list .. cashing out or raising money ..
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THRESHOLD
Super Contributor
Sure - but nobody ever says "Hey we are listing to cash out - so please take our company off our hands at a premium!" So you have to wait for time to pass and let their actions inform you of their true intentions. In the case of SSK - it actually looks like quite a nice operation - it just isn't my "cup of tea."
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prancing_horse
Super Contributor
Threshold, may I ask what you would have done in his position.Where were you going to find someone to give you 700 bars for your business but were longer to keen to steer the ship. He not only steered well since listing, but put has put very capable people in key positions that will keep it on course
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Harathke
Regular Contributor
Its not like he was operationally involved much anymore. So, basically, who cares? A non-exec cashes in his pension in the form of equity. Ce la vie.
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THRESHOLD
Super Contributor
Prancing horse - may I direct you to please read my comments properly and not ask irrelevant questions.
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Not applicable
who cares? Everyone should care. When you buy a business - the first question you ask is why are you selling? If it is a hot prospect, why sell? So when you list a company, why not ask the same questions? Why are they listing the company? Because as an investor, it is a key point to note - what are they planning on doing with the capital that gets raised? If the directors are just planning on loading up the equity and NAV - then selling their shares on the open market, well I think I would want to know that beforehand. It is not to say I would be against it - but the intention should be made clear.
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THRESHOLD
Super Contributor
EXACTLY! And don't feed us this robbish you are dumping this fine asset on the market to increase liquidity. Just tell it like it is: "I want out!" ((As confirmed by his personal friend "Prancing Horse")
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CHATTYCHAT
Super Contributor
The Band Jumped in mass 12 Jul 2011 Meyburgh, Willem Sell 1 500 000 1 220 18 300 000.00 Indirectly Beneficial 12 Jul 2011 Quinn, DG Sell 350 000 1 220 4 270 000.00 Indirectly Beneficial 12 Jul 2011 Fizelle, J Sell 203 540 1 220 2 483 188.00 Indirectly Beneficial 12 Jul 2011 Stefanutti, Biagino Sell 26 330 000 1 220 321 226 000.00 Directly Beneficial
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Not applicable
Really not sure why you're all so upset.. Capitalism is about making money above all else. Do you really believe the coporate spin doctors ..ever... It's like saying I whish the politicians would just tell the truth. It just ain't gonna happen.
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CHATTYCHAT
Super Contributor
Agreed - HOWEVER the upset is all about the announcement by SSK that liquiduty of its shares was sought - hence the sell-off. And then, in the aftermath, not only the old man Stefanutti is involved, no - a few big shots joins in @ 1220c - and leaves the market with more liquid shares and a holding by an institutional investor. Now is the latter going to hold on, or place them in the market to the benefit of those hungry for construction stock speculators out there?
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THRESHOLD
Super Contributor
Now if only you could convince organised labour (and the Malema's of this world) of this.
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CHATTYCHAT
Super Contributor
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Agathos
Occasional Contributor
Prancing horse - you've confirmed it. I sold all my shares in SSK and wondered whether it was a good idea. You've just confirmed that it was indeed the best thing I could do. When it comes to building companies and listing companies we should look at the experts - i.e. Warren Buffet and his peers. Keep your shares and give the shareholders confidence. Obviously Gino doesn't believe there is enough value in his company anymore. I grant anyone riches that works hard for it and is blessed enough to keep it, but it should never be a selfish ambition.
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Agathos
Occasional Contributor
Look, business is about making money. But if directors sell shares - especially the huge amount that StefStocks execs are flinging, one should ask if they REALLY have shareholder interest at heart. My answer is a definite NO NO NO! It is the classical example of insider trading, where they do not add any real value to shareholder's, but only to their own pocket. I sold ALL my shares beginning July and I am not at all sorry I did this. Warren Buffet is a classical example of the perfect capitalist! What do you think will happen to Berkshire Hathaway should Warren decide to sell half his shares? It will drop like a stone, leaving the shareholders with ALOT less - Gino would not be as rich today were it not for shareholders, neither the other executives. So a word, pay close attention to your shareholders - they can cause damage as well. Obviously this will be my last post to SSK - I will be looking at shares that actually adds value.
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