Options Update: Satyam volatility elevated; shares collapse on accounting fraud

Few months back, When i saw the maytas - hyd metro deal, i felt that the deal is very good.. where the maytas will build,operate and maintain the metro rail system, in proposed routes by govt.. they will get the land from govt...
the model of operation is - they pay in turn to govt 35,000 crore in 35 years, for this deal... they get this by charges and ads displayed on metro... its like highway and toll gates..
so if they are paying 35K crore to govt, how much maytas would be getting???

then i thought it would be nice if satyam get maytas metro project for design and IT.. that would be a big project for satyam... like GE has its US metro transport projects with satyam...
transport projects are really big ones, and most beneficial ones...
later i came to know that satyam is doing maytas project... and one of my colleague is into that project...

ramalinga raju has started EMRI(108 service), and till one half year back he was running it by his own money.. later he expanded services to other cities in AP and now to many other states...
last year in satyam annual day meeting, ramalinga raju spoke about EMRI and said it is doing very well and saving lot of lives... now EMRI is shared with govt. also...
all IT services for EMRI, will be provided by satyam.. including vehicle tracking, maintaining routes, hospital information etc... so if EMRI gets bigger satyam gets more revenue from EMRI...

so ramalingaraju developed different projects in home country such that, they will benefit satyam in a good way... So even if US gets into recession, there are many other projects that are supporting satyam very well, like for coming FIFA satyam is official IT sponsor, and satyam expanded to may other parts of europe, africa etc...

so few days back, when i heard satyam maytas aquisition, i felt it was a very good deal... seeing the bright future of maytas and its infrastructure projects, and his relation with YSR, I thought satyam will be benefited most, as it is investing in infrastructure company in a developing country, where much scope is there for growth.. so right now satyam's profits can be shared with maytas in construction phase and maytas can share its profit in later stage, when it is fully operating... I thought this would make satyam very big....

Just a day later the shares prices went down by 50% and investors made big comments on board, and deal was taken back...
investors and media said, how can a board agree to buy a property that is held by raju family and why the maytas was valued at 1.2billion...
and they said it wil be a injection of satyam's cash reserve into raju's family...
some said what raju knew abt infra, instead it is good for him to continue with software...

But maytas is having good projects in hand and a land bank of 6000 acres, so the valuation is right, may be it is a bit over valued, but that should be accepted, seeing the future scope...
When raju started software in india 20 years back, when not all people realised the growth potential, investors encouraged him in later stages... and raju is well known in AP as a rich raju family with lots of farms and lands...
why did he get into software business??? its because he believed in the growth of software service industry...
now when he believed, in infrastructure, which is obviously a big thing in developing country, investors dumped him...
for example caterpillar is such a big company now, because it did the right thing when US was developing - it sold earth moving machines for all infrastructure that was being built..


I felt raju will resign the board of directors of satyam and will concentrate more on maytas...
Few days back, the same thing happenend... there was news that many directors resigned and raju also submitted his resignation...

Now today when i saw the raju's resignation letter... i was shocked, not because of what he stated in that letter about showing extra profits and the differences in cash reserves, but bcoz raju himself saying this out...
now everyone is convinced why raju wanted the maytas deal - bcoz raju said there are cash differences so they wanted to balance this, so they overvalued maytas and tried buy it...

Why he has to say this out now?? I think, there are some cash differences from actual to books, but now he has created more cash differences by generating some documents... so all the cash differences he has shown extra might be taken by RAJU... in this way he got money for the great effort put by him, for building one of India's top 4 software service industry...

Now since he has lot of black money (extra cash differences shown by him), he can win in any case against him, even CBI probe will be taken care by YSR, and raju can concentrate fully on MAYTAS and make it a leading infrastructure company in India and soon in world(consdidering the potential of infrastructure in India-most emerging powerful nation)... since in India to get big projects, we need to spend lot of black money, now that raju has it, he will soon become successfull with Maytas...

What do you think??

Thanks,
Vigyan
www.mokean.com
(for custom design t shirts)

Satyam shares collapse as chairman resigns. http://www.iwebie.com/satyam-stocks-crash