Paytm Karo

Why I will not buy paytm share?

Morgan Stanley on Friday bought shares of Paytm’s parent company One97 Communications for Rs 244 crore through an open market transaction. Why do I think it’s a bad idea for me?

I am not a fundamental guy, so finding deep value stocks is not my expertise. I am sharing with you the chart of Paytm, and I will tell you the exact logic behind why I will not invest in this company.

Let’s start with IPO investors who believed in this great fintech company. Some of them may have left after the fall at various prices. But there must be some investors who still believe in this great fintech company and see value in it, like Mr. Madhur Deora, CFO of Paytm.

So those ever-optimistic investors are still invested and must be in great pain. There is a human tendency not to accept losses. May be during November of 2022, it hit a new low and there were some good news.

So again, some deep value investors must have entered, and the price rallied. This is the only phase where some traders/investors must have made some profit. But it couldn’t sustain above its previous peak, reason being some of them must have tired of waiting for a long time or achieved breakeven price, so after thanking God, they must have exited.

So investors are trapped at all prices; whenever the price tries to rally, some investors will get some relief, and some lucky ones might exit at breakeven. This process will go on and on, and the price may find it difficult to rally.

Only a strong turnaround and certain positive earnings visibility can absorb all this selling. This may take a little more time than expected.

Disclaimer: – I am not SEBI registered advisor. Please consult a professional advisor before taking any decision. This is not buy/sell recommendation.