Ann: Proposed grant of options to Directors, page-16

"With hindsight" - is that your excuse for everything? "Oh, its only with the benefit of hindsight I could see it was a pyramid scheme". "Oh its only with the benefit of hindsight I could see that shoving my hand into a tank full of piranhas was a bad idea".

To illustrate my point with ICQ, think of this as an example.

There are two business of exactly the same nature in the exact same circumstances, except in a parallel universe. Lets call 'em ICQ A and ICQ B.

ICQ A spends a lot of time analysing its cashflows and realises that it is likely to require a cash injection within 12-18 months to help ensure it can reach break even point. The company could go gung ho, and not do anything and hope for the best, but decides to raise cash now anyway because they recognise that the markets are good now, and it is better to raise it on their terms when there is certainty.

ICQ B instead either pays no attention to its cash flows, or decides to take the cowboy route and goes hung ho. After letting its cash pile run so low that it may not last another two quarters before going bust. Heck, the cash is so low that there's a big one off cap-ex needed in the near future that no one paid attention to that might mean it may not even be able to keep the lights on for another quarter. ICQ B finally decides to do a cap raising.

Who do you think will raise money at a higher price? Do you think ICQ B can raise on equal or better terms than ICQ A, despite B standing right near the cliff? It's not ICQ B's fault that it's standing on the edge of a cliff right?

The folks at ICQ B I'm sure would love to have investors that say, "oh, but that's with the benefit of hindsight". It lets them off the hook everytime. But I say it's not hindsight, its good management.

What makes it even worse in the real world is that ICQ raises $11.5m, makes no mention of the retail offer... then three days later, it raises an additional 30%+ above the initial $11.5m. This tells me that management has either:

a) caved into shareholder whinges big time and raised cash it did not need - because if it did, it should have done it in the initial cap raising. Wasted money on cap raising expenses etc leaves the company as a whole worse off to get money it does not need. A 30%+ top up three days later is ridiculous.
b) stuffed up - and realised as they were putting together the quarterly, that the cash flow was unexpectedly very deeply in the red and they realised they did not have enough even with the cap raising. Oops. Lets go back to the market for a couple more mill. Conveniently, we can hide behind an underwritten entitlement offer.

In other news the other day I went to the shops. It wasn't raining when I left, but when I got to the shops it was pissing down. The dumb side of me that makes excuses for everything would've shrugged and went "ohh wells, benefit of hindsight!". But luckily the smart side woke up this morning and punch the dumb ass side in the face when it saw those black clouds and brought a raincoat and an umbrella.