Chart Destruction This is imo one of these near perfect examples of a chart being destroyed for the wrong reasons. A pretty consistent 90-100% buy rating prior to the SICPA announcement clobbered down to 30%.
Yes, some of it (a probably small portion) can be attributed to the markets in general but the lion’s share is clearly deal / surprise related. While the initial surprise based reaction is somewhat understandable thanks to the rather popular “Shoot first, ask questions later” concept, the prevailing weakness clearly stems from people not understanding that owning a small piece of a rather large pie beats owning a large piece of a small pie 9 out of 10 times.
This deal will open doors EUO/GFI could have never dreamt of opening …
In many parts of the world the concept of partnership, especially between “unequal” parties, immediately raises red flags as in “It's usually the little guy who gets screwed”. Germany per example, and Switzerland is identical, has a very different attitude towards partnerships. Maybe the best and certainly not widely known example is the typical and in many cases legislated participation level of Union representatives on company boards which btw, is not window dressing as is so often the case in N.A. It is designed to create a true partnership between the “big” and the “little” guys and it works very well as evidenced in the rarity of strikes, walkouts etc.