The Judo Discount?
Gazprom has recently sold two blocks of treasury shares, amounting to 6.5 percent of its equity, at substantial discounts. The most recent sale, of a 3.6 percent stake, was at a whopping 11 percent discount.
The sale was to a single buyer. Had to be a pretty well-heeled dude to come up with the mere $3 billion purchase price. (Was it all cash? Or did some accommodating state bank fund a big chunk of the deal?)
The lucky single buyer’s name has not been disclosed, but rumor has it that it is Putin’s longtime friend and judo buddy, Arkady Rotenberg. He would definitely count as well-heeled.
As I’ve said for years, folks: judo is the path to riches. At least in Russia.
The behavior of Gazprom’s stock price has been rather strange. Yes, it dropped about 2.5 percent on the news of the discounted sale, but this drop mirrors almost exactly the rise in price on the day prior to the announcement.
While looking at the stock price, I noted that Gazprom’s market cap is now . . . . drum roll, please . . . . $85 billion. LOL. I remember they halcyon days of 2007 and 2008 when Gazprom management bragged it would be the first trillion dollar company.
Only off by two orders of magnitude. Could happen to anyone.
But it’s not surprising it happened in Russia, where the to-my-friends-everything-and-to-my-enemies-the-law essence of the Putinism has succeeded only in consigning the country to becoming an increasingly irrelevant blip on the world economy.
More intra-elite resource-shuffling. It might be confirmation bias, but I’m counting this as another data point in favour or Douglass North’s thesis.
Please let us know when you receive an invitation to attend/speak at a conference in Moscow or St. Petersburg. Remember to take your judogi with you and get limbered up beforehand! ‘Ossssu!’
Comment by Ex-Global Super-Regulator on Lunch Break — November 23, 2019 @ 7:55 pm
What’s up with the “All Putin” weekend? This is the gang who Hilary wanted to “reset” our relationship and Trump’s the bad guy. Right?
Comment by The Pilot — November 23, 2019 @ 10:21 pm
‘This is the gang who Hilary wanted to “reset” our …’
Rival gangsters usually want to negotiate their spheres of influence. Iz normal.
Comment by dearieme — November 24, 2019 @ 9:47 am
@Pilot–The weekend just coincidentally happened to present a target-rich environment.
Comment by cpirrong — November 24, 2019 @ 6:58 pm
Eh?
“$85 billion. LOL. I remember they halcyon days of 2007 and 2008 when Gazprom management bragged it would be the first trillion dollar company.
Only off by two orders of magnitude. Could happen to anyone.”
A little over one perhaps?
Comment by Tim Worstall — November 25, 2019 @ 6:54 am
@Tim: pendant!
Comment by dearieme — November 25, 2019 @ 9:07 am
What do you mean, irrelevant blip? Just last week the Russkies successfully looted the toilets and even some used underwear from the Ukrainian ships they had to return. Things are definitely looking up for Russia, as long as the U.S. sends humanitarian aid on time.
Comment by Ivan — November 25, 2019 @ 3:39 pm
I’m disappointed there aren’t any Russophiles commenting on this post. They’re always good for a laugh.
Craig you should have shorted the stock. You could have retired and become a full-time blogger.
Comment by David Mercer — November 26, 2019 @ 6:03 am