Overweighted, Siemens throws Osram shares

Reuters reported that Handelsblatt, the largest shareholder of Siemens, plans to sell 17% of its shares. The report pointed out that Siemens intends to resell its equity in OSRAM to Asian manufacturers.

There are no further details on Asian manufacturers, but from Siemens’s press release last Tuesday, we can observe some clues. This press release revealed that Siemens was very disappointed that OSRAM decided to spend 200 million euros to develop white LEDs. The subsidiary decides.

In November, when OSRAM announced that it would invest in the construction of an LED epitaxial plant in Malaysia, OSRAM had been criticized by its fifth-biggest shareholder for not taking the opportunity and diluting its profit to oppose it. After the establishment of the plant news, the stock price also fell by 25% and set a maximum one-day drop for the company. According to Reuters, OSRAM has announced that it will invest US$1.1 billion in the construction of an LED epitaxial plant in Malaysia, allowing the original investors to expect the company to switch to the more profitable car or street lighting market after selling the lighting fixtures.

Michael Muders, the manager of the joint fund, which holds the second largest shareholder of Osram’s 2% stake, mentioned that “shareholders have lost a lot of money and have lost trust in management.”

Over the past four years, OSRAM has already cut one-fifth of its production capacity because it is gradually unable to compete with its Asian counterparts. The German monthly magazine Manager reported earlier that Muders was "shocked" by the new growth strategy.

On Wednesday, after OSRAM announced its new plan, its shares fell by a quarter and set a record of the company's largest single day of decline. On the same day, with the transaction price of 39.04 euros, although there was a 0.7% rebound after a 24% drop, there was almost no recovery.

"There is no sign that they will consider strategic returns. We should withdraw." Muders said. At the same time, he added, "If the strategy does not change, he will vote against the board of directors at the shareholders' meeting in February next year."

Siemens, who is also a shareholder of Osram, is not satisfied with the recent development of OSRAM's share price. Due to changes in OSRAM’s policy, the value of OSRAM shares held by Siemens has shrunk from the original 940 million euros to the remaining 680 million euros.