After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.
There was a good smack around the head for some shareholders this week.
ASX listed company Liontown had its takeover bid of $3.00 a share pulled and then announced a placement at $1.80 a share.
All within the space of four days!
A $3.00 bid withdrawn on Monday. Placement at $1.80 on Thursday.
Accompanying the news on the placement was a 51-page investor presentation, of which the first four pages were dedicated to legal disclaimers. A few pages later, they had 11 pages which went under the heading of ‘Key Risk’.
Then in the mix of all of this, we have Gina, who has amassed 19.9% of the company by splashing out a lazy billion dollars at that $3.00 a share level.
Those lucky enough to sell to Gina were told that they will never see $3.00 again. Now she will be happy to keep it at 19.9% by doubling down at $1.80!
This drama is better than any episode of Home and Away.
But wait… It gets better.
The chairperson (how PC of me!) of Liontown – or ‘Meltdown’ as some shareholders have nicknamed it – is Tim Goyder.
Now Goyder must ring a few bells for you, as his cousin Richard has been frantically trying to hang on as chairperson (there, I’ve done it again – daughter will be pleased) of QANTAS.
Richard didn’t seem to want to own the QANTAS crash landing but poor old cousin Tim has had to own more than just one Meltdown.
He is also a very large shareholder in Chalice Mining as their shares have nosedived, after a disastrous release of their long awaited scoping study.
Basically, Chalice got slammed by analysts who believe that they used way too high commodity pricing assumptions in the makeup of the study.
In the latest annual report, Richard’s cousin Tim was long of 40,574,195 (10.43%) shares. So at their last price of $1.87, Tim’s investment comes in at $75.8m, though at the time of the scoping study report release, CHN were trading at $5.04 a share.
So, if you’ve had a bad week, think of poor old Timothy’s wallet to cheer you up.
Whilst he’s been going through the car’s ashtray, Gina’s just upended her handbag onto the boardroom table at her broker and said ‘I think there should be enough there to cover my little billion dollar shopping spree’.
Pride before the fall
Talking of bad weeks, back on the 19th October 1987, we all witnessed Wall Street falling 25% in one day and I always remember my father telling me that ‘I don’t know what goes on in your world but my house hasn’t just fallen 25% in value’.
Well two years later it did!
So beware of the Ides of October.
I’m following Warren Buffett on this one and am sitting on cash, ready to pounce like an underwriter when you can earn a 5% fee on an issue 35% below its last trade.
Or ‘undertakers’ as they are nicknamed in the market.
Not because it means death but because of the black suits they wear and how they use their own tape measure and not yours to measure up the price at which they earn their 5%.
I’m told that Gina has her very own special tape measure. I reckon Tim’s is now so twisted up that it won’t even contract, no matter how hard he presses its little red button.
As for me, I have a wooden ruler and I just keep thumping the table till I get the price I want, or use it to rap a few knuckles on the way out.
You always want to leave a bit of blood.
Just try and make sure it’s not all yours!
The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at [email protected].
Feel free to contact him with your best stock tips and ideas.
