Bio-Treat bond default

Bio-Treat appeared in the headline again today, but for the wrong reason.

0200 GMT [Dow Jones] Bio-Treat Technology (B22.SG) down 6.5% at S$0.36 after company says it has received a notification of default on convertible bonds due 2013 from Merrill Lynch; adds Merrill has notified company that bonds that Merrill holds, which had an original face value of S$27.6 million, now immediately due and payable.

As explained in the company announcement, the bond comes with a put option. For most of us, it is sort of confusing, but I think it just simply means the bond holder has the right to request for bond termination and return of the borrowed money. The company also explained, it has no problem in servicing the bond, except the issue of remit the money out of China to repay the bond.

It depends on which angle you look at it. Technically, there may be nothing wrong with the operation and company strategy. But, at this poor sentiment market, any uncertainty could cause severe market reaction. From my observation around the forum, many still likes the counter. Be it for short term trading or for its long term fundamental.

I have long sold my position after found out that, most of the time, it has appeared in the headline for wrong reason. The key attribute to successful stock investing is certainty. It might be prudent to avoid at all cause.