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163

01/06/21

16:27

Post #: 53569883
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Originally posted by austted: ↑

From today;s AFR in relation to the ASIC release

"The best way to avoid short sellers: transparency

ASIC’s suggestions for targeted companies are perhaps more practical. Where the company knows a short report is coming, it should have a response ready – something that rarely seems to happen.And where a short report lands, ASIC says the company should go into a trading halt and prepare a response. (There will be some who disagree with this, justifiably arguing companies don’t pause trading when an analyst puts out a positive report on a company. But again, this likely comes back to ASIC’s bias towards shielding investors from losses.)But if there’s a key lesson to be learnt from ASIC’s activist short seller position paper, it’s surely this: “Our research indicates that activist short-selling campaigns tend to target entities with complex and opaque corporate structures and accounting practices, or poor disclosure.”The best way for a company to avoid being attacked by a short seller is to be transparent about its business model, its financial statements and internal structure.

Err on the side of too much disclosure and use key company events – investor days, annual general meeting, conferences – to explain how your products or services actually work, how your business and industry is changing, where the growth is coming from, and why you have an advantage on your competition.

There’s nothing wrong with having a business with a model that is hard to understand or whose growth looks better than competitors or whose products and services are particularly technical. But these businesses need to work particularly hard to back up their financial accounts and their growth forecasts with evidence.

Companies that do this well will leave fewer shadows for short sellers to exploit. Firms that continue to do it poorly probably deserve a taste of the transparency that credible short sellers bring."

Well Nearmap play with a pretty straight bat but are in a game with "products and services are particularly technical" . Perhaps they have some more explaining to do to investors such as the amortization issue that seemed to confuse many some time ago. Trust they brief us well on the current EV legal case as far as they can without helping the opposition.

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Noise Noise noise...don't get caught up in noise. This is not assisting your bank balance.

NEA Price at posting: $1.73 Sentiment: Sell Disclosure: Not Held
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