Satyam: Raju and the Gang

This week Satyam (SAY) took a massive beating from the market dropping more than 50% on Tuesday after it announced it was going to acquire 100% of Maytas Properties, and 51% of Maytas Infra. Why the beat down?

Well, some of the folks who are in charge at Satyam, spefically B. Rama Raju (founder) also has family ties within Maytas properties. Hmmm...

With all the scrutiny going on these days surrounding corporate governance and ethics in light of our global economic situation, what was Raju thinking? Helping his family members out seems like a pretty amatuer move... even more amatuer than the actions of my ever so proud Governor of Illinois (Mr. Blagoevch) ... F'Em as he would say.

Satyam came up on my radar due to their favorable operating margins within the IT services market. I'm dropping them off the "interesting" list now. Not only was the deal questionable in ethics, this type of diversification strategy makes absolutely no sense (Maytas is into proptery development, Maytas Infra is into infrastructure). Satyam backed off the deal the day after their shares took a major blow. Pretty isn't it?