These kind of economical value parameters determined by historical prices is borderline ‘stupid’ and ‘criminal’ in my little world right now (yes this is taken from its context of analysis so perhaps little unfair for my to judge as such).
Even if I do not own Fortum and never will, analysts and fund managers and corporate leaders as well has so far failed to realize the underlying shift society is undergoing at the moment.
Yes, perhaps I am a bit alarmist at the moment.
But what is happen now from a pure economical perspective is something we have never witnessed before with many unintended consequences.
These economical sanctions towards Russia will hit western societies bad. And we have not seen them yet.
Sorry for my rant. But be very careful with investing in companies with large Russia exposure as they may be treated like pariahs, or outcasts. Again, this is not necessatly aimed at Fortum, but companies in general with a large presence in autocratic societies.
Edit: to develop my thinking a bit. What I actually criticize is here that companies in general are mostly valued based on economical numbers. Fair enough.
But in cases such as Fortum, the analysts and corporate leaders should add a political element. This has only now happened. Yes, there was always the Russia risk, but many thought that card would never play out and was as a result not reflected in the share price.
But in the case of Fortum I could never understand why they did double down on the Russia risk with Uniper. Why add more risk to an already highly risky energy market? Especially by buying a German company. And why sell all monopoly based business with energy transfer in Finland and Sweden? (which I would glad to be an owner of).
Take the best example of managing risk: Handelsbanken. They never entered the Baltics, Russia and Poland. Other banks did. And look how they ended up. Handelsbankens motto was not to invest (heavily) in countries that are not governed and rules based on traditional western norms.
Edit 2: To understand why Fortum has acted like it has (with regard to Russia) one need to consider that it operates in the context of Finland and now also Germany (Uniper), which both in a way or another have looked at Russia as an opportunity with embedded challanges that both countries have viewed as manageable and worth taking. This societal context has probably influenced the decision making processes within the company. Especially given that the Finnish state is the majority owner of Fortum
Edit 3. Kyle Bass sums this new order investors need to navigate. This applies also to us small time investors in this forum (not only in this Fortum forum, but in general).
Rant over.
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