The Long Tail : 21 Posts Later…

Well, it’s been almost 2 months since I launched this website and it has been a very interesting journey so far. I have had about 10,000 visits to the site and a lot of abuse on HotCopper. I get relatively few comments on the blog but plenty of email, 70% of it scathing.

I have learned a few key lessons since I started this. I’d like to share them with you.

1) Nobody seems to care about corporate governance. The more I watch the behavior and actions of ASX-listed life sciences companies, the more underwhelmed I am about a variety of fundamental issues such as conflicts of interest, executive compensation and shareholder communication (more on this in a minute). My biggest gripe is that there are a plethora of companies out there whose management simply exists to take a salary and not much else. Yet sadly I don’t really hear voices at AGMs challenging the acceptability of this. Why?

2) ASX disclosure rules are horribly abused. I realise that it is an intrinsic challenge of life sciences companies to maintain news flow when data is a bit temporally patchy by virtue of the nature of clinical development. But in my view, any company that piece-meals clinical (or even pre-clinical data) should be studiously avoided by public investors. That’s not good scientific practice, that’s a propaganda strategy designed to appeal to impatient and emotional retail investors that are irrationally super-glued to their individual investments.

3) On the topic of emotion, I have learned that every company has their set of die-hard groupies. Benitec, Oncosil and MediBio shareholders are particularly scathing. Anteo shareholders are not so far behind. Yet for each of these companies, I can’t understand why investors aren’t asking basic questions about operational performance, business model, governance and technology competitiveness. They must understand at some basic level that there are issues but every time they get raised in a public forum these entrenched individuals just get aggressive.

4) Speaking of aggressive, I have never seen such an amazing level of informal and unregulated Director/Officer to shareholder interaction. I’ve routinely witnessed emails or telephone call ‘transcripts’ rehashed on trading forums from shareholders who seem to have enough klout that they can pick up the phone and get commentary or feedback.

Doesn’t that bother you? it bothers me.

For me the biggest challenge has been the consistent assertion that I am simply a nay-sayer that likes the sound of my own voice (the latter may be true but it is still a bit unkind). Actually, what I want to see is a balanced set of opinions out there, particularly on the sell side. If Australia is to have any sort of competitive life sciences sector – indeed an investment landscape that our own pension/wealth funds might be interested to support – then we need quality. Right now it is really the Emperor’s New Clothes and I am a bit fed up of watching his bollocks waving in the wind.

It can be so much better.

Going forward I have also committed to covering a few companies that I actually think highly of so as to not appear like a grumpy bastard all the time. I am a grumpy bastard most of the time but I will make a special effort for you.

3 thoughts on “The Long Tail : 21 Posts Later…

  1. Ouch… feeling unloved I can see – but you can learn a lot from those that have differing views and I think it is healthy. Problem with HC is that it gets personal as everyone can hide behind a cloak of invisibility (except you !).

    For what it is worth, I agree with most of what you have to say on this post, although I dont recall the OSL HC shareholders being as aggressive with you as Medibio but I think there were some solid reasons for that.

    Take the positive that your posts are worth reading which is why so many people are revisiting

    Like

  2. Pingback: Uscom : Burn Notice | The Long Tail

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