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Bharti – MTN Deal Off (My Take on Disclosures)
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We briefly wrote about the Bharti – MTN Deal and were off the opinion that it would not go through primarily because Bharti would be Marrying Up. MTN has higher revenues, a wider reach, it too, is in markets that are likely to grow (admittedly not as fast as the Indian Market).
The 2 firms had discussed merger options as well. After signing and presenting the term sheet to MTN on the 16th, Bharti has now called off talks with MTN citing “too many movements from the latter’s side” as reason.
Three basic points of contention between the 2 firms were:
Where will the firm be Based (Headquarters)?
Foreign Ownership Laws (Limiting FDI in India to 74% in a Firm)
Price
PS – Financial ‘Advisors’ Have Already Been in a Speculative Frenzy advising people with respect to the valuation of the stock (as they always are when some big news breaks). The market knows better.
I do not own an inconsequential number of shares in Bharti – and you know what even if I did – then you shouldn’t care because my writing (or any blogger/ journalist/ guest’s writing for that matter) shouldn’t affect your investment decisions in any way.
You might say that disclosures are in the spirit of the ethics of Journalism et al. All I can say is that there have been enough cases in our country, which prove that Disclosures have been unnecessarily abused. Channels like TV18’s CNBC have often been used as platforms by brokers and ‘advisors’ to misguide investors and turn them into speculators. The best way out is for the general public to be aware of the fact that their investment decisions will never turn out well if they follow ‘advice’ that is dolled out on Mass Media Vehicles.
It’s not for nothing that Charles Ellis, noted investment adviser to many fund companies in the United States and author of ‘The Investor’s Anthology’ has aptly stated that “It must be apparent to intelligent investors who if anyone possessed the ability to do so [forecast the immediate trend of stock prices] consistently and accurately he would become a billionaire so quickly he would not find it necessary to sell his stock market guesses to the general public.”
In my opinion a good Disclosure (from an ignorant jounalist/ blogger/ guest who is well meaning and does not really wish to misguide the public at large) would be “I don’t know sh** about the Market, I own some shares but what the hell, it doesn’t really matter because this is just news and I honestly don’t know how it will affect the market, because if I did, then I wouldn’t be earning my bread working for a Mass Media Vehicle. Don’t even think about your investments after reading this”
For someone who seeks to use the Mass Media Vehicle to temporarily manipulate prices and activity, another kind of Disclosure would be more apt – “I’m looking to misguide you and make a quick buck (don’t worry – you’ll barely ever see me in jail)”
It’s quite clear to me that people in the Mass Media should actually be disclosing i.e. revealing or uncovering more than just their ‘holdings’.
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