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Sunday, March 27, 2011

About Davis + Henderson Corporation (DH) Trading Halted Status – Part 2

Friday March 25, 2011 seem to be like any normal trading day for David + Henderson Corporation (DH). But just the day before, on March 24, 2011, a trading halted had been apply to Davis + Henderson Corporation (DH). The trade halted had been applied BEFORE DH publicly announced its acquisition of Mortgagebot LLC for US $231.8 million. On March 24, 2011, Davis + Henderson was halted at 12:22 p.m. PT. DH made its public announcement shortly after. The halt trading had been resumed in the early morning of March 25, just on time for the opening of the stock market.

Personally, I don’t think it was a really good idea to proceed this way. On the day of March 25, 2011, DH reached one of its lowest points since a long time: 19.90$. During the day, there’s been a mini-crash in DH value and it’s been caused by the halt trade event, not the announcement of DH latest acquisition. Reason why I am saying so is that if investors would had reacted really badly following DH acquisition, DH had closed the day of March 24 at 19.90$ or even lower. But DH closed the day of March 24 at 20.26$. Not too bad. In those days, investors seem to be quite sensible to any type of uncertainties. Adding one of the types of a halt trade on top of everything else (situation in Japan, etc etc etc) was a bad decision made by maybe (?) DH, but probably DH.

I know the following has nothing to do with DH, but I will like to talk here about another company I hold, Exchange Income Corporation (EIF). On March 9, 2011, Exchange Income Corporation (EIF) announced they had acquired Westower Communications for $79 million. Following what, Exchange Income Corporation (EIF) declared they had entered into a new $235 million long-term debt facility. No halt trade had been made before or after the announcement made Exchange Income Corporation (EIF). The reaction of investors could have been very bad. Imagine, the company is getting more than 200 million into debt! I don’t know anything about finance. One event is totally stranger of another event. Nothing can compare, everything is different. Well, following Exchange Income Corporation (EIF) announcement of its Westower Communications acquisition, EIF title gain in value! In other words: when it come to finance, small investors like myself can’t never know what’s going to happen. Don’t even try!

I went through one of the most difficult week of my life following Japan tsunami disaster. Why? Because I taught I was going to live again the same events of 2008: another market crash! The market didn’t get destabilize following the Japan tsunami, but I got. Japan is the world third largest economy. How come the Canadian stock market didn’t crash following the Japan tsunami? It’s something I will never understand. Following the most difficult week of my life, I learn that what investors are really into are US statistics. If US loss jobs or have a high unemployed rate than yes, the Canadian stock market might crash. But only at the condition of such event. My reactions are not the ones of the investors mass and it make me think that yeah, I am nothing more than a small investors and yeah, I barely understand what I got myself involve in. Investing in period of uncertainty can be a real nightmare. But it doesn’t mean I am calling it quit. My investments are gaining in value, I still earn money. And during that time, Japan is doing through a very hard time. Any of this really makes sense. I am not supposed to make gain while a disaster is happening. But it’s happening. So I told myself that, for a while, I won’t even care, I won’t try to understand the nonsense.

Several analysts had ranked DH as a HOLD. If the next financial results of DH are good, DH could possibly gain in value. How long would it take before DH hit its old 22.35$ (highest of the past 52 weeks)? We’ll have to wait to find out.

1 comment:

Brian Birdsong said...

Well, the stock has gone sideways since March. As compared to the Canadian stock market - the TSX composite index - taking a little dip in late March but recovering nicely. I'm surprised that DH wasn't hit more by world events, but then again most markets didn't move that much on recent news - except up.


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