SATYAM COMPUTERS: future outlook - down 54% on nyse

Satyam computers had recently announced its plan for acquisition of 100% stake in Maytas properties and a 51% stake in Maytas infrastructure arm. Satyam computers is also listed on New York Stock Exchange (NYSE) and the stock plunged over 54% as a reaction to this news.

Real estate in India and more generally all over the world is in bad shape. In India especially, any 'reasonable' bottom for real estate prices does not seem to have been reached. So this acquisition was bad for the future of Satyam. And before even i make this comment there is an obvious question to ask: WHY THE HELL DOES SATYAM WANT TO ACQUIRE A STAKE IN REAL ESTATE COMPANY ?

Hint: Ramalinga Raju, a cofounder of SATYAM owns a 31% stake in Maytas.

Horrible decision for investors. However, Satyam has cancelled its acquisition plans after this strong negative reaction by investors. So no large movements in Indian Stock Market expected because of the acquisition moves. The stock however has been steadily declining in value over the past couple of months. Should there be a large drop (say like 40%) on NSE (or BSE), it would be a good idea to buy this stock with the time frame of a couple of days in mind and with a stop loss of 10%. However a large drop seems unlikely now in view of this Bloomberg news.

Below is a three month price-volume Chart of Satyam Computers (automatically updated daily by Icharts).

Neither price movements or simple technical indicators, nor volume, nor fundamentals- nothing exciting in this stock. A good idea to stay away. However, should there be a large drop (say like 40%) on NSE (or BSE), it would be a good idea to buy this stock with the time frame of a couple of days in mind and with a stop loss of 10%. However a large drop seems unlikely now in view of this Bloomberg news.