Satyam to announce winning bid on Monday

>> Thursday, April 9, 2009

Satyam Computer Services Ltd. will open the bids to buy a stake in the company Monday , Deepak Parekh , one of its government-appointed directors, said Wednesday. The Satyam board has asked S. P. Bharucha , a former chief justice of India, to oversee the sale process. Mr. Parekh had said Saturday Satyam will decide on the winning bid Monday.

With Friday being a holiday hence no trading day, this gives us one last chance to enter in to Satyam related stocks like Spice Communications , which had a tremendous run yesterday registering nearly 18% gains intra-day . LNT is on a roll being up nearly 5%. Tech Mahindra is up 2%.

But there is certain amount of risk here, the company which does not win the bid will be on Bear-Radar and can go in to free-fall mode. So let's just say this is a risky trade to get in to.Worst case scenario if IBM is to win the bid, we will see the Indian companies give up gains and we may even see up to 10% fall in prices.

In my personal opinion, Satyam is a buy under 45 to reach at least 50-52 levels. This is a win-win situation for Satyam so can be safely bought for a short term trade. See my Satyam Stock Pick here

What do you guys think?