All hail Temasek

Pravda reports that Temasek has made a 184% return on its $3bn investment in rights issues over the past eight months, and they even provide a handy list of all those winning trades. Bravo, Ms. Ho, well done, good thing you’re staying on instead of letting that seppo blow-in from BHP come in and ruin everything.

But you can’t get in on a rights issue unless you already own the shares – and Pravda, being Pravda, doesn’t say how much Temasek made or lost on the original shares.

So let’s see if we can figure that out for ourselves.

Chartered Semi (273% return on the rights investment!) floated in November ’99 at $33/share split adjusted. Temasek was, and still is a 60% owner via its Singapore Technologies subsidiary. It’s now trading at $2.25 per share, and there’s 940 million shares out… so… carry the one… gee that’s a big number, that can’t be right… carry the one… wow, maybe it is right… Temasek has lost $17.3 billion on Chartered Semi since it floated.

But they’ve made nearly $350 million on their rights issue investment! And the Straits Times has dutifully reported it. Bravo, bravo to everyone concerned.

Related: this xkcd comic.

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4 Responses to All hail Temasek

  1. iguarako says:

    Correct me if I am wrong.
    I am not sure if it was Temasek, thru S’pore Technologies, that had initially seeded the start-up of Chartered. If they had, then they would have invested at par during the start up stage. As is quite common before IPO, the par value shares are then further split (in some cases 1:100; that’s why there are some shares at SGX with $0.01 par value.) If this was the case then Temasek’s investment per share would be a fraction of their $33/ IPO pricing and they may in fact be making a profit by this divesment to ATIC.
    You calculation on Temasek’s massive loss is correct only if they had bought their shares at $33/ during Chartered Semi’s IPO. I think they did not but would have actually sold some vendor shares during IPO to cash out some of their initial investment. It is the public and institutional investors that bought at $33/ and my guess is that most if not all had got out long before Temasek is doing now.

  2. Josh says:

    True. But even if Temasek was a seed investor, they’d still be pretty unhappy with this investment.
    Chartered Semi has pissed away money ever since it floated, and Temasek has been long 60% of the company all the way down from $33.
    (And the point of this post – that the ST is glossing over Temasek’s gigantic losses in favour of touting its gains on the rights issue – still stands.)

  3. Anonymous says:

    Your correspondent should get his facts right
    before putting in print. Blindly anti government
    stance does not contribute to credible info
    or debate

  4. Anonymous says:

    Your correspondent should get his facts right
    before putting in print. Blindly anti government
    stance does not contribute to credible info
    or debate

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