GPACKET & FIDELITY

DJ MARKET TALK: Green Packet +0.4%; Fidelity Ups Stake
24/03/2006 04:10:00 PM

1610 [Dow Jones] Green Packet (0082.KU) +0.4% at MYR2.37 after peaking at MYR2.38; filings indicate US-based Fidelity International has emerged as a substantial shareholder after acquiring 20.4 million shares, or a 5.5% stake, in early part of March. Trader says retail investors reading move to mean "there's value in this stock and further upside potential." Stock faces resistance at MYR2.45 (March peak). (VGB)

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A lot has been said about GPACKET in the past when its share price surged together with MTOUCHE and OSKVI. Many bloggers and forum participants called it a speculative stock with no fundamentals and the usual stories about syndicates, crooked promoters, etc. etc were thrown around.

Fidelity is the largest and one of the most respected mutual fund managers in the world, with USD1.4 TRILLION under management as at March 2006. Does the investment by Fidelity guarantee that GPACKET will go even higher? No one can say that for sure... but their track record speaks for itself. As far as I know, Fidelity is not a hedge fund which makes speculative short-term trades.

Does it mean GPACKET is a good company fundamentally? Again, despite many people saying it is a speculative counter, remember that it did make RM30 mil net in '05 and is virtually debt-free. Because the base technologies are in place, no substantial R&D expenditures are expected year-to-year, enabling it to generate huge margins.

I'm not saying all this because I'm holding GPACKET shares. Just an interesting thing to note for those who are more inclined to open up their minds, instead of merely listening to the general rhetoric of others who may not be familiar with the issue at hand. At the end of the day, everyone should exercise his/her own judgment.

/ichithekiller