Australia's largest stock trading and investment forum Australia's #1 stock forum

AKE

Click for more information

0.00%

$9.83 allkem limited

Solid post mate. A Goldman Sachs history is all I needed to hear...

First 4285 Last

Share
Profile

Follow
stevo 111

4,984 Posts.

3105

12/08/23

16:05

Post #: 69305617
Share

Originally posted by triage ↑

Shareholders in Allkem have to come to grips with the reality that the most recent underperformance by Livent is not an aberration but a feature of Livent under the management of Pall Graves. Ever since being calved off from FMC Corporation in 2018 with Mr Graves in charge the stand-alone Livent has underperformed.

Furthermore, shareholders in Allkem have to understand that Pall Graves and Livent are undertaking a classic manoeuvre underperforming companies do and that is to buy better performance. Allkem is effectively being used as a get out of jail card for and by Mr Graves: on the back of Allkem's tier one assets and its strong pipeline of development projects the combined Newco under PG's leadership will likely show improved performance for a period in comparison to how Livent by itself would have performed. But when a key reason for Livent's underperformance is the lack of ability of Pall Graves then in time with PG holding the reins Newco's performance will tend to regress to the level of underperformance that Mr Graves is able to deliver.

I suppose I can understand why Mr Graves is not very good at running mining and industrial companies, he after all rose to where he is by being no doubt a smooth talker and a no-holds-barred salesman: he seems not to have a grounding in running actual businesses that extract minerals and produce chemicals. A tell that he lacks the ability as a keyman company manager is the fact that FMC Corporation did not keep him on. They hired him from Goldman Sachs and they had time to weigh him and to measure him but in the end they apparently found him wanting so cut him adrift with their lithium business. And here's a tell that he simply does not "get" mining companies: in the joint presentation with Allkem's Martin MD to announce the merger, PG said there was as good as no synergies in having Allkem's James Bay and Livent's Whabouchi project in close proximity to each other and yet Martin MD and Allkem's Australian operations boss, Liam Frankyn, both have highlighted the point that one of the attractions of the merger is the synergies between those two projects. In that joint announcement Mr Graves did his level best to stay vague and generic in his comments - obviously working on the notion that it is better to remain silent and give the impression of ignorance than to speak and confirm it - but in my view we were given a glimpse of his ignorance in his no synergies observation.

I can 100% see the attraction of Allkem merging with Livent. What I cannot understand is why the Allkem Board is selling out AKE holders with a 56:44 split of shares, a 50:50 split of Board members and the chronically underperforming Pall Graves effectively getting all the marbles. Given all that has happened since the merger was announced I think it would be far more fair and reasonable for AKE holders for a 60:40 share split, a 7:5 Board split and someone other than Pall Graves being CEO. I am looking forward to what the Independent Expert, Kroll, has to say.

Expand

Solid post mate.

A Goldman Sachs history is all I needed to hear when I originally looked into Livent on hearing of the merger.

Having many conversations with a few in the investment/banking sector types over the years I can tell you in all honesty they employ them for what their tongue does, not their brain. If you can sell this, make us this much, you’re hired.

Some of these guys could talk a parrot to death.

Literally you are employed to leave all morals behind and just make the company money at nearly any expense.

That is their world.

AKE Price at posting: $14.54 Sentiment: Buy Disclosure: Held
12 Upvote

1 Great analysis

Reply

Top Stories

ENV

Enova Mining unveils "high-grade" REE drill hits at Coda North, Brazil

VUL

Vulcan appoints investment bank and M&A veteran to board

MKG

Mako sniffs gold at 170 g/t at Cote d’Ivoire's Napié play

NAM

Olam Agri raises Namoi takeover offer to 75 cents a share and receives shareholder backing

Week 37 Wrap: HotCopper likes Cuban oil; markets shrug debate off for Putin; firebrand quant says social media a market threat

MLS

Metals Australia kicking off plant study at Lac Carheil; Canadian tariff tailwind potential

AZY

Antipa divests its Citadel interest to JV partner Rio for A$17M, refocuses on Minyari Dome

ASN

Utah authorities sign off on Anson's lithium extraction plans at Green River

MM8

Medallion Metals kicking off 15,000m drill run at Ravensthorpe gold play

Dale Gillham's weekly wrap: US fracking support boosts outlook for Australian gas stocks

There are more pages in this discussion • 867 more messages in this thread...

First 4285 Last

Add AKE (ASX) to my watchlist

SPONSORED BY