Is the honeymoon over?, page-22

I can't speak for others really but there are lots of people who comment on having bought into the hype.

Well I think if we accept that people bought the hype (presumably referring to hotcopper hype) we should also accept the possibility that those posting enthusiastically and positively who are seen as creating the hype had also bought into the "information" they were being fed. Read the newsletters that came out, the announcements and the analyst reports, the company presentations. Can you remember that we couldn't reconcile the Moelis report with predictions from the business. Well Moelis were way out as well. Petra's early reports were out of whack. I've reread early reports from Baker and Young. They aren't right either. I've read every announcement from inception. And so on.

I know of at least one adviser who bought in after a phone call. He didn't muck around and caused a short term blip upwards that we all noticed. I wonder what he thinks and who he now listens to and whether what he is being told now is correct.

Do you think that hotcopper enthusiasm would have had any effect at all if the company announcements hadn't been speaking of big deals, market sector spread and revenue, promising outcomes, rapid growth etc. Off course not.

Did you write on hotcopper that you thought these announcements were hogwash? Did you contact the company and seek clarification? Did you take a negative view of this company led information? If you had then nothing any hotcopper poster wrote would have had the slightest impact because you'd have been predisposed to disbelieve then.

If you have the slightest tendency to optimism or a preference for trusting people it's much easier to listen to information with an optimistic ear. It's just a little unfortunate that some of those people could also write persuasively while exuding belief and optimism.

(Btw I'm not sure anyway that they were wrong about the possibilities but they were way out on timing and they misjudged things themselves - just as did those who you are now reinforcing. We all did but I can certainly show you that I tried on many occasions to clarify information and reconcile what made inadequate sense. The responses I got I can now put into context but at the time I couldn't)

It's also a shame that those who didn't believe in the stock or management hardly gave reasons. I'm sorry but one liner put downs, poorly formed responses, unpleasant digs at individuals, mistakes in basic terminology such as the now infamous margins affair can't compete against everything else that was presenting the positive case. Even the type of comments you make now don't help.

Had any of these people with contrary views declared their sources, their reasons, the information on which they based their "down ramping" one might have been more inclined to listen. ( There is however one particular poster - who may or may not still read - who may be interested to know that some of what he wrote was actually helpful later on. I think I know his identity. But I guess it's unlikely we will ever sit down for a coffee and chat about a few things. )

I know that I have a greater tendency to look for issues and problems in a business because that's my training but I'm very aware that one always forms logic from a particular premise. The premise we were presented with by the company gave every reason to see rapid growth and the rationale given at the time for low margins (the bespoke solutions, the trial phases for large demanding customers) was believable in the short term. (I also believe the reason we are being given now (the price we had to pay for raw chemicals and not getting volume discounts ) is probably a post rationalisation and partially but not fully accurate).

Remember that some of these enthusiastic posters stayed in through the rise and fall as well. In other words they've been impacted. Others sold out at or close to the top. Are you envious of them? Do you blame them since they clearly benefited? Are you pointing at them? It's a pointless exercise.

It's easy to direct anger away from oneself and blame others for ones own decisions. But that doesn't actually happen to address the source of the problem.

What I do know for myself is that once the veil is lifted it changes things. Maybe kept asking why I'd changed my mind. I didn't change my mind about the essence of the business but some other things changed for me. The shift in how I looked at things started at last year's AGM. For a the company at Alexium's stage of development remuneration and bonuses of the size on offer made no sense. They addded substantial cost and made the margins problem worse. The protest in the form of a strike was greeted with what I considered a diatribe against shareholders. There were other disconnects and conversations that made no sense and were surprising to say the least.

Then of course came the December fail. Well that has to lead to challenging things. A few emails and private conversations. A bit of information here. A bit more there. Patterns. Looking back at some things other posters had highlighted or suggested. Research. Conversations. Putting two and two together and sometimes more than that. Finding out things that some people thought were hidden. Letters to the Board or to individuals. Responses from them. Finding out or being told things that were fictions or omissions. Admissions and excuses. Contacts in critical, well informed and influential places. Advice and support. More research. Reading and rereading. Seeking further advice. And in the end one draws ones own conclusions and acts on those.

I recently shared a link I found with a small group of shareholders. I found it in the public domain so others can probably find it too if they search hard enough and use a bit of creativity. It was a clear demonstration of what we have all been dealing with. And I mean all. In some ways it was breathtaking.

These days when I post I think very hard about what I post and why I am doing it. But not for the reasons you might think. I'm also aware that people find my posts a lot less interesting now that I am not posting my long "well reasoned" explanations of why I think Alexium is a good thing. That in itself is interesting. In other words people would still much rather give credibility to those who post positively about the company's future. And why not?

At present however I am interested in two things - observing the process by which trust has been destroyed and the impact of that over a longer term, and seeing some accountability exacted from those who hold the accountability - and that isn't hotcopper posters.

I am also interested in watching Alexium grow and prosper. The chemistry is magic. I like the way Dirk and his team interact. I like what feels like an ethical stance. But I'm still very wary, and with good reason given that not everything has been refreshed yet. I think there are probably still a few issues to sort, I don't know how long this adjustment phase will last and I imagine that this young leadership team has a few additional skills to develop. I wish we could hear from the VP sales on the webinars as well. Hearing his view of the markets would be interesting and I'd sure like to get a better sense of how he sounds and thinks and how aligned he is with the rest of the team. That's a gap for me. I'd also like to see the additional sectors that they are talking about again actually eventuate. I'd like to get a better feeling for how long the period of getting rid of bad business is going to last. I'd like to see less reliance on such a small number of customers. I'd like to have a better feel for which of the announcements from this year implied things that will not occur any time soon (NASCAR?). I do think we haven't got communications quite right yet though I'd rather have what is happening now than what happened last year.

The tragedy for Dirk in all of this is that once upon a time the things he is now talking about in terms of the future might have generated excitement. Now one just doesn't dare!!!!

Parsifal