To be honest this price action is nothing short of appalling, but at some point the senior execs need to be held accountable and take responsibility for this. I'm not suggesting Larry and Peter try manipulate the price or anything dumb like that, but as the senior execs they have a very clear responsibility to not only grow the business, but to their shareholders. If this were a listed US company I think many larger shareholders would now be asking some very serious questions about what the f*ck is actually going on with this, and making it clear that a sustainable increasing share price is part of their performance metrics, not just one that skyrockets, then crashes back down to earth. I get that many here bought in at $1, $2 or whatever and so aren't that fussed, but if you want the price going up consistently over time the company needs to start looking after the people buying the stock today. To be clear I'm not underwater myself, but am sick to f*cking death of seeing signifcant paper gains eaten alive because we mismanage our relationship with the capital markets and our share float.
It's all well and good for Larry and Peter to focus on growth, but they need to turn their attention also to mending what is effectively a broken share registry:
- Far too many shares available on the market
- No major substantial holders - and no, BOA only borrowed the bulk of those shares, they didn't buy them
- Continuous cap raisings - thank f*ck the most recent one was a convertible note, which delays the dilution at least
Whilst this has been rinse and repeat for some, I think the sale of the Westpac stake amplified the problems we're in. If Westpac had have simply sold their shares I could believe they wanted to realise gains and free up cash, but the fact they announced a deal with APT the following days demonstrates a complete inability to work with our major holders. Who knows what exactly Westpac wanted, but the fact they could liquidate a massive holding and then partner with a major competitor looks like a total fail on our part. I get that Larry and Peter don't care about the stock price, however they're going to need to soon - this company has no major instos as long-term holders - why? Probably various reasons, but the major one is because it's far easier to make 100% gains twice a year on the runs up and 50% gains twice a year on the crashes down. Rinse and repeat. I would argue fixing the share float is a strategic priority for this company now - no major instos are long-term substantial holders, and if this keeps up, they'll likely lose the retail investor cohort too. I was a keen LTH myself, but think why the f*ck would I bother when as said I can make 2 x 100% gains going long, and 2 x 50% gains going short each year. As a long-term investment, this company is rapidly losing credibility for the simple fact you could wake up in two years time and see your 400% gains incinerated into nothing for no other reason than it's time for pullbacks to come in. We trade at a laughable multiple compared to APT and SZL - I know they have pullbacks also, but they're pulling back from about 40x and 25x revenue - our best? Probably not much more than 12-15x.
I've never met Larry or Peter myself, but from their public statements and their actions with the markets my guess if they're pretty arrogant guys - the fact they repeatedly say the company will post numbers "too good to ignore" demonstrates a complete lack of awareness - the market has ignored the company's good numbers for years now, they don't give a sh*t. I honestly think they think the market will just wake up and start buying the shares on the open market and the volatility will reduce, which is simply a fantasy. There's plenty more problems with this volatility, such as the impact on employee stock options, recruitment and retention, which I could bang on about, but the post is large enough as it is. The thing I struggle to understand is that Larry could seriously be sitting on an extra $1bln+ net worth to his existing net worth if the volatility/valuation issue was improved, but they don't seem concerned. By the time they do get around to giving a sh*t about the stock price performance they may find they don't have any retail investors left to go with the non-existent long-term instos.
If you're also jack of seeing material gains needlessly going up in smoke with this stock time after time, like this f*cker and send it to the front page of HC. I don't actually expect anyone from Zip to read it, but it's good to make clear that retail investors won't stop buying the stock, we'll simply just start joining in on the 2 x a year dumps and 2 x a year run -ups. If you can't beat 'em, join 'em.
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