Author: Icon8888 | Publish date: Fri, 1 Apr 2016, 06:38 PM
(How often do you encounter oil price at such low level for extended period of time ? Tony Fernandes decided to bet big)
Today, Air Asia announced that Tony Fernandes and buddy will be forking out RM1 billion to subscribe for 559 mil new Air Asia shares at RM1.84. Some forum members worried that this will cause Air Asia shares to crash upon uplifting of suspension on Monday (because of EPS dilution of 20%).
Are you kidding me ? The founder and CEO of a PLC is forking out RM1 billion to buy his own company's shares at zero discount to market. He will only do that if he is convinced that share price can easily stay above RM1.84 (even after EPS dilution).
TONY FERNANDES IS PUTTING MONEY WHERE HIS MOUTH IS. THAT IS A BIG VOTE OF CONFIDENCE FOR AIR ASIA.
I interprete this latest development VERY POSITIVELY. As Tony Fernandes' funding is very likely from margin facility, he will be under pressure to ensure that share price will perform. Over the next one to two years, we can expect a series of road shows to fund managers as well as multiple value unlocking exercises to ramp up share price.
Air Asia is truly living up to its promise that NOW EVERYONE CAN FRY.