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Mark Mobius Calls Petrobras IPO "Abomination", Says We Are Entering "IPO Bubble"
Ironically the only sane call on the now openly deranged market action comes from an long-term institutional establishmentarian in the face of none other than Templeton's Mark Mobius. His brief and spot on assessment : "The entire Petrobras issue is an abomination and a terrible violation of shareholder rights. We may be entering an IPO bubble. It means that people are just not looking at the values and irrationally buying these things." Oh shut up Mark, who cares about values... Yet perhaps someone can channel a little Mobius on CNBC so he can quell some of the overly exuberant lunacy that is spewing forth from the now leaderless TV station, which nonetheless does nothing to change the autopilot "ponzi propaganda" mode.
For those who may be unfamiliar with the specific structure of the Petrobras IPO, here are some details via Bloomberg:
Petrobras, based in Rio de Janeiro, sold 2.4 billion common
shares for 29.65 reais each and priced 1.87 billion preferred
stock at 26.30 reais a piece in the world’s biggest share sale,
according to a statement late yesterday. The stock fell 1.3
percent in Sao Paulo trading at 2:39 p.m. New York time. The oil company is spending about $224 billion over the next five years to boost production to 5.38 million barrels a day by tapping deposits trapped under a layer of salt beneath the ocean floor. As part of the sale, Petrobras issued about $42.5 billion of stock to Brazil’s government in exchange for the rights to develop 5 billion barrels of oil reserves.“The whole idea of the government not putting any cash in and setting a price on these reserves that’s questionable at best is unfair,” Mobius said.
And the thing that pisses Mobius more than anything is that same rigged purchasing that is occurring each and every day in Europe, and which only Mad Money clowns swallow hook, line and sinker:
“They can claim that Brazilians are well-subscribed and so
on, but in reality in order to make sure this thing take off the
government is making sure its organizations” invest in the
deal, said Mobius. “The question is: Who were the buyers?”
At least we know in Europe the buyer is the same entity that will soon be completely insolvent, but it is relegated to that continent. Hopefully in Petrobras' case it is not US taxpayer that will be forced to foot that specific IPO.
But it appears Mad Money is not the only dumb "money" out there. There is always BlackRock:
Will Landers, who oversees about $8 billion in Latin American stocks at BlackRock Inc., says that whether investors disagree with the terms of the deal or not, it’s positive for Brazil’s stock market.
“The fact that Petrobras was able to raise the largest equity offering ever done in the world, 10 days before a presidential election shows how far this market has come,” Landers said in an e-mail. “I continue to be very positive on the Brazilian stock market, and removing this huge overhang from the market has to be seen as positive.”
And that pretty much summarizes all you need to know about the schism on Wall Street. Also, for those curious why the Bovespa is dropping, why Petrobras shares are falling in Brazil, and why Brazil is now intervening almost daily in the FX market, here is a recap straight from the horse's mouth.
h/t London Dude Trader
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I always knew this Petrobras IPO was going to be a disaster. I always knew it... That's why I didn't put one cent of my money on this. A lot of people who I know have put good money on this. Good luck to them...
Eu já sabia! haha
Já tirei um troco a descoberto nessa droga hj...
Insert bad P-36 disaster reference here.
http://www.youtube.com/watch?v=kx6WIG7ygdI&feature=related
I certainly wouldn't touch that shit.
"Moria! Moria! Wonder of the Northern world! Too deep we delved there, and woke the nameless fear."
For more than five millennia, the Balrog 'slept' in its deep hiding place (perhaps it was using this time to grow in power, or rebuild its physical form). It remained undisturbed as the Second Age passed, and long into the Third. At last, the mithril-miners of King Durin VI stumbled upon it and it awoke from its long sleep..
+1
CBIMBOC
http://williambanzai7.blogspot.com/2010/09/c-bimbo-c.html
No doubt they floated that thing at the absolute worst time.
When oil prices are at multi-month lows and oil stocks are the worst performing sector in the NYSE.
Why didn't they pull it off when the Peak Oil hysteria shriekers and carnival barkers were wailing:
"Energy Pearl Harbor!"
"Gas lines are coming!"
"Rationing is on its way!"
"We are at the Tipping Point!"
"Better get ready for $200 crude!"
"The 3,000 mile salad is history!"
Instead, gasoline prices have totally collapsed, and we are swimming in excess supply.
Those guys at Petrobras couldn't have timed it worse.
Note how they churned over 100 million shares and it it went nowhere.
Oil is up over a buck. By your standards that means peak oil is back.
ping
'Sell when you can, not when you have to'. You think the syndicate cares if it went up on day 1 ?
Welcome to the new reality of higher commodity prices. There is not a government in the world that is not going to try to get their pound of flesh so you can expect more of this to come.
Governments always want to kill the goose that laid the golden egg -- higher taxes on capitalism in one form or another.
I don't know what his politics are for certain but I see via a Google search that he was a big donor to the Liberal Democrats so he should be all too familiar with this phenomenon -- as he is a supporter of a system that allows Petrobras to take its pound of flesh from the investing community.
Anybody know why the CFTC website went to shit ? Need COT data... wtf
Mobius, nobody listens to techno any more...
Baldachin Mobius. Pigeon droppings on the goblin's egg head..
You all should understand what all these loosers think about this IPO over here! On the midia, in forums...
Lol!
OT: I just saw an article on CNBC pushing Christmas....... I guess back to school didn't go that well.
Since PBR will park the money in Brazilian Bonds (to be issued, AFAIK) this is a novel way of auctioning government bonds, through a shell company that declares to have some value stored 7Km below sea level... just need to reach it.
I see the odds of Brazil "flipping Socialist" and nationalizing or re-nationalizing again all natural resource assets within 20 years at 100%, the population demographics will force a Socialist revolution, its a democracy, and the overwhelming supermajority of people are poor indigent uneducated Socialist peasants-that will gleefully vote Socialist like the people of Detroit at every opportunity.
What's worse is all politcal partys involved are promoting Socialism and proposing using oil to pay for Socialized medicine.
There isn't enough oil on the planet to finance socialized medicine, the state of Brazil will loot PBR like Venezuela loots its oil company, today's Petrobras investors are tomorrow's Brazil national healthcare donors.
Yep. That's why I've stayed away from this thing for quite some time, even though I passed up good trading opportunities as a result. The Brazilian gov't's encroachments on this company have increased under Lula and if you follow any of his comments on the company over the past year or more, what he's been telegraphing should be of concern to all property-rights loving shareholders. The following is what finally put me off the company last year...http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aoxLaBe_2xyI
It ain't socialism
It's FASCISM
Right-wing
You're right though, it is FASICSM that destroyed Detroit.
Our fascist country, promoted wars for cheap oil, and detroit built the cars around that.
Oil is just a stepping stone, to Nuclear, then Fusion. Must of missed that one. I know the market and world and all gov'ts did.
Fascism is a political system and ideology championed by socialists, "progressives" and often nationalists but it's a creature of the LEFT, not the RIGHT. Don't take my word for it, read up on actual American and European fascists of the early 20th C. Politically, the far right is usually defined by small government libertarianism - any further right and there's no government at all...anarchy.
-Please show how post-invasion Iraqi oil production has been keeping the price of oil "cheap."
-Unions probably killed Detroit more than anything else. And under a fascist system the government would have just taken over the car companies....oh wait, Obama already did...
Buy gold dump every asset. Fuck their dillution and theft plans.
but ben says there aren't bubbles, and the entire FOMC says there aren't bubbles, so how can mark be right.
the federal reserve must be destroyed!!!!
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