Some thoughts on Pyramid Saimira Theatres Ltd

(Excepts of my morning mail to the Paid Groups)

Dear Suman ji,

Please tell me about PSTL as there is some bad news.I had purchased 350 shares on Monday. Should I average it out? Should i wait & watch?

Vikas Gupta,

Rohtak (Haryana),

India.

Vikash,

A very good morning and thanks for the query. Yes you are right, there are some news regarding Pyramid Saimira Theatres Ltd (PSTL), which is more related to share trading by some entities rather than the fundamentals of the company.

Now let us see what is the news which appeared in a section of media today:

Pyramid Saimira banned from trading

MUMBAI: The Securities and Exchange Board of India (SEBI) on Tuesday banned Pyramid Saimira Theatre Ltd. (PSTL) from dealing in stock markets for seven years after it found that the company colluded with seven persons to corner the portion reserved for employees in its initial public offer in 2006.

However, the company, when contacted, said it would file an appeal against the SEBI order.

As per SEBI investigations, seven persons had cornered 98.5 per cent of 4.22 lakh shares in the “employee category” in collusion with the company during the initial public offer of Pyramid Saimira Theatre which hit the market in December 2006. — PTI

Hence from the above you can clearly seen that, "(SEBI) on Tuesday banned Pyramid Saimira Theatre Ltd. (PSTL) from dealing in stock markets for seven years".

Then we get another news, "However, the company, when contacted, said it would file an appeal against the SEBI order."

Hence this is a effect-neutral news for the shareholders, who do not have to worry as long as RDB Industries Ltd is there, as one of the strategic investors in one of its divisions.

Also, I have mentioned earlier also, that such orders are in fact positive for the shareholders because in that case, we will be expecting a less manipulative trade by the promoters.

However, in this case the promoters have talked of filing an appeal and so that order does not have any effect at least in the short term.

There would be some knee jerk reactions, because many shareholders and investors might think that the shares/stocks of Pyramid Saimira could be DELISTED, WHICH IS JUST A FANTASY OF SORTS.

The company is doing excellently well and should come out with positive news within the next few months.

Moreover, the company would be there and so will be its promoters and other strategic investors. Those who have invested in the scrip should wait for the right opportunity to average it out when distress sellers, have had finished selling.

HENCE AT THIS STAGE PLEASE WAIT FOR THE SCRIP OF PYRAMID SAIMIRA TO STABILISE BEFORE AVERAGING IT OUT....

I am sure in the short to medium term, the scrip would give us good return like what happened in case of Atlanta Ltd or Vadilal Enterprises Ltd in the past....

THEREFORE, sing "DON'T WORRY BE HAPPY", along with the musician, Bobby McFerrin. On a lighter note: This song released in September 1988, became the first a cappella song to reach number one on the Billboard Hot 100 chart, a position it held for two weeks.

Thanks!!