The Equity capital market world is a strange, yet fairly predicable one. Due, in no small part, to that most dominant human trait (within the ECM world at least); ego.
Bell Potter have announced they have ceased coverage of NEA.
Chris Savage had been keenly following and pumping out NEA research for several years...only to get dudded by NEA's corporate pass to Macquarie in the latest capital raise. Bell Potter clearly lead the coverage on the company and got no lolly for the work. Having headed an ECM unit myself, I can readily understand that BP would have called NEA and asked the "WTF" question. Obviously not satisfied with their response, BP have deservedly pulled Savage's funding for coverage of NEA (costs about $25-40k/year/stock).
But it is highly competitive. The slick lads and lasses at the (use to be) millionaires factory may have lined up the instos ahead of the deal, gone to NEA and said... "we can do you for $20m @ 70...good for 2 days...take or leave it (code for "cant tell anyone"). Oh....and we'll clip you for $1.2m."
Well, at least I hope it went that way...I'd hate to ponder the implications that NEA have been planning this for some time...like the sound of Clifford's nervous tapping about the timing of his sale....like purposely blowing off the largest broker that covers you. Hmmmm.
It has been, to me anyway, all about the relationship and not just the $. Hope it was worth it Rob.
Anyone seen any Macquarie research??
(silence)
Cheers,
NEA Price at posting:
66.0¢ Sentiment: Buy Disclosure: Held
