I pretty well did the same KP with SGH and was getting a very bad feeling I was repeating the same mistake again. That’s also why I got out. Dropped 20k but that’s better than dropping the lot I figured. Same strategy same result...Great companies get destroyed by people with their hand in the till who buy “assets” at the wrong price but they’re spending other people’s money without doing the maths in regards to the repayments as Calvo has previously mentioned. The one similarity that haunts me about SGH and MYX is the “pipeline” of income from assets. If you can’t turn the pipeline into a significant income stream quickly enough then basic maths beats you. If half year results are quietly going gang busters then I’ll be kicking myself and MYX could fly. If results are poor and Myring doesn’t hit the market quick enough then Mayne may need to pursue a C/R for another S/R stuff up. Can any retail holders out there afford to stump up the cash? Banks are not forgiving for a CEO having a brain fade and over committing company finances for products yet to hit the market with no guarantee on time frame. The responsible thing to do was pay down debt with cash flow to stabilise the company’s finances/ balance sheet. Unfortunately S/R announces just before the AGM that he’s buying in to E4/DRSP when he already knows earnings are reducing. IMO this is financial madness/suicide. MYX/CSL-CSL strong earnings growth where it has NO competitors. So it can afford higher debt because it pumps out strong cash flow and earnings growth YOY and that’s why you pay $330 a share for CSL. CSL spends more on research per year than the value of MYX. Great CEO’s create value over time with patience and keep the market well informed. Impulsive desperate CEO’s don’t invest their own finances in their own company. If S/R or any other insiders believed in the story then why hasn’t anyone in the company bought into the story? I hope MYX does well at the half year results but even if they do MYX has an expensive loose cannon CEO with atrocious communication skills and that does not bode well for the future. I don’t believe he took a lesson from the Teva debacle and blamed the generic market for his mistake, a mistake that if financed by debt would already have MYX in administration. By not accepting the Teva lesson and learning from his mistake he’s likely now created a secondary financial mistake by paying out to other companies rather than directing those valuable finances to debt reduction. Anyway why would he care when he’s getting paid 3 mill a year? I could retire on one year’s worth of S/R’s wages. Make no mistake SR is a big gambler, all or nothing. I’m sure he had to sell a whole pile of unpaid for shares as donated by Mayne share holders on a margin loan as called in by his financers. That says he lacks financial sophistication IMO. I hope MYX can recover from this. It potentially has a great story to tell with the wrong guy telling the story unfortunately. Just too many unknowns.
MYX Price at posting:
40.0¢ Sentiment: None Disclosure: Not Held
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