Invest In Russian IPOs?

The Washington Post has a great story today about investing in the Russian Energy IPO.

For comic relief, you can’t get much better than yesterday’s prospectus from Rosneft, Russia’s energy giant, seeking $10 billion from Western stock investors gullible enough to believe that Russia can now be trusted as a reliable business partner.Never mind that the company is a financial house of cards, or that its assets have largely been stolen, or that its chairman’s day job is as President Vladimir Putin’s deputy chief of staff. In fact, it says right there in black and white that, because of its ultimate control by the government, the company may, from time to time, “engage in business practices that do not maximize shareholder value” and cause it to “take actions that may not coincide with the interests of minority shareholders.

The new Rosneft investors will join William Browder, arguably the country’s largest Western investor, whose reward for years of evangelizing on Russia as an investment opportunity has been an order barring him from entering the country again — presumably until he calls off his campaign against insiders who strip their companies of valuable assets or unilaterally dilute the stake of minority shareholders.

But a lot people will not read the prospectus and will blindly throw their money away.

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