The market knows something, and the market is rarely wrong, and the market has uncategorically spoken.
A significant number of financial analysts have run the figures over PPL, and not one fund or investment house has stepped up to the plate to invest - not one !!
This share price has fallen from 50 cents to a low of 22 cents. It's on a PE of something ridiculous like 5.
The cost of Cohort was too expensive, they paid double what they should have, which displayed the limited negotiation skills of PPL management. And the cash and escrow terms literally crucified current shareholders, who were not taken into account in the deal. No fund will invest into PPL under these terms.
The Cohort founders took the money and raced out the door - gone - probably sunning in the Caribbean and sipping Margaritas.
And then came the excuses for the declining and poor performance of Cohort in Australia, put down to the fact that some Cohort clients cut back on their spending during the past year. Oh really? But PPL still then went ahead and paid the ridiculous full price. And the directors never answer questions from shareholders questioning this reasoning. Something smells off ! Then the MD/CEO of PPL resigns - something smells rancid.
But they still went ahead and paid the exhorbitant price for Cohort. What is the point of having a deal if it can not be adjusted based on the poorer performance of the company PPL was acquiring.
In truth, the paper agreement which set out the cost of the Cohort takeover provisions was not worth the paper it was written on. It was a fait accompli regardless of what declining revenue Cohort had.
The shareholders were actually duped, and management were disingenuous on this issue, which is probably one reason why the current MD/CEO is moving on. When shareholders don't receive consideration or answers, when they are not respected, and when there is a question over management trust, as in the Cohort accord, then funds and investment managers are never going to invest.
The whole scenario of the decline of PPL's share price, and the resignation of the MD/CEO/Founder, coupled with the high cost of Cohort, reminds me of the John Lennon lyrics - "just gimme some truth - all we want is the truth!". One of two things happened here with the Cohort acquisition, there was complicity or there was negligence.
The directors and management of PPL never respond to shareholder enquiries. Why is that?
Now PPL are currently searching for a new MD/CEO, because the founder wants to be an innovation officer. Well, PPL could sure do with some innovation, and a good hard-headed business negotiator to replace the current CEO/Innovation officer and move the company forward. It will be very interesting to see who steps forward to take up the challenge.
I still wonder who is currently doing the high level of selling. Will we see a 3B soon?
Look - I don't usually subscribe to conspiracy theories, and I tend to believe in Occam's Razor, so in reality we will probably find that these guys are great I.T. Technical Consultants, and terrible business people - which is a very common theme world wide for geeks.
Quite literally, the geeks need to get out of the way, so it's probably a good thing that they've found a quiet little corner where they can park the current MD/CEO and rename him as the Innovation officer. He'll probably cash in some shares and rest a while, and when the innovation thing isn't a roaring success (like it won't be - because this is just another of the company's ruses - which further dupes current shareholders), he'll quit in a year or so. Wait and see, it's nothing but an Exit Strategy IMHO.
The market always prices up companies it has confidence in - go look at the PPL graph plunge over the past 18 months and make up your own mind. This could be 12 cents by Christmas, which is why they'll probably raise at 20 cents soon.
How many performance bonuses are the directors and management getting for halving the share price?
Gw
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