I could not resist that. I apologize. I also apologize for the Satyam overdose. But, you know none of my feeds are showing anything exciting.
For 100 rupees you can get 2 shares of Satyam and a pepsi Mycan and possibly some change back. You don’t have to fight for the mycan like Ranbir Kapoor does the latest ad.
A lot of questions are coming to my mind. Looks like there are more questions than they are answers. How exactly is this a 7000 crore scam? Our first and best source right now is the letter.
5040 crores of non-existent cash
376 crores of non-existent interest accrued
1230 crores of liability which was arranged by Raju personally
490 crores of overstated debtors position
That totals to 7136 crores. Since Raju has arranged those funds personally and they never go into the books let us leave it there. Take the 1230 crores out of the scam. That would leave us with 5906 crores.
If going by the earlier valuations Satyam was a $2bn company. Taking a 47 rupees per dollar that would be 9400 crores. That would mean the company’s value is 3494 crores? Which again is $740 million?Â This also means that the company is still solvent.
Satyam has 53000 employees and 185 of the Fortune 500 companies are its clients. The company is now valued at ~$700 millioin. That is so damn cheap. Why isn’t anyone buying it?
Even the valuation is around $700 million there are bunch of reasons why no one is coming forward.
- Satyam is set to lose half of its clients following the scandal.
- Many of the 53000 employees are already looking for greener pastures. Rumor is that 15000 resume’s have flown out of Satyam just yesterday.
- There is a catch-22 situation here. The valuation of $2bn was when Satyam had 5000 crore of cash. Now that the cash is not there would the earlier valuation be $2bn?
- Many believe that there is a deeper mess.
- Whoever buys Satyam right now will spend most of their time in courts. There is a pending case against Satyam by Upaid. Following this revelations by Raju more will follow.
The only saving grace could be that no top management is involved other than Raju. This is highly unbelievable but that is what we have right now.
If we wait a little while you might actually get 4 shares of Satyam and 2 Pepsi Mycans.
PS : Please don’t seize my blogging license if I have commited a accounting fraud in this post.