Autostrada & Italian stocks – lessons learned ?
I own one Italian stock and stories like this unfortunately seem too common with Italian companies.
I think I actually fear the lack of Italian corporate governance more than the lack of shareholder rights in Japan. At least in Japan management is quite conservative, in Italy companies are run like little fiefdoms.
The more items I read like this the more I consider just liquidating my position and watching Italy from afar for now.
In the particular case of Autostrada however, I actually have a very different opinion.
Yes, I had to liquidate the position with a loss, but let’s look at the facts:
1. As quoted in the original post, the information that the majority shareholder had bought the first part of Impegrilo and might require Autostrada to buy the shares was available already in Decemeber, however not at Autostrada’s homepage but at Fondiaria’s homepage
2. It was also clear that Autostrada wouldn’t have the money to do this and might need a capital increase to finance this
3. However, not only I was suprised, but a lot of other market participants as well, as the loss of now almost 20% in the stock shows
So clearly, one conclusion would be that Italian Governance sucks and you should keep away from those stocks.
Another conclcusion however could be: In the Italian stock market, existing information seems not to be fully valued into share prices. So we clearly see here some inefficiencies. In this case it was negative information, but as well it could be positive information (see the sale of the LatAm sub at SIAS).
So my conclusion is slightly different:
A) Yes, there are corporate governance issues in Italy
B) However there are also market inefficencies which could (and should) be exploited
C) However, this reuqires an “active” approach, among others searching for ALL available information
For me, this experience is rather an even bigger motivation to research GIPSI (or PIIGS) stock in the future. In my expereince, inefficient markets provide much better oppoertunities than highly efficient ones.