denbo - I held Slater & Gordon shares previously. I am interested to see whether Australia's first listed law firm stays in business. The business model, and treating WIP as profit for accounting purposes seems questionable.
I think Slater & Gordon is a very good business. Unfortunately, it has been let down by poor management. The Quindell acquisition, and the huge amount of debt taken on, is what has brought Slater & Gordon to its knees. That was a management decision pure and simple. The actual Australian business is very good. If Slaters had continued with smaller acquisitions the SP would not be under 30c.
I hope Slater & Gordon does survive. I am just pointing out that there is considerable risk buying shares, even at this price.
The entire board of Slater & Gordon should resign. The destruction of shareholder value has been horrific, and is the opposite of what management are supposed to be doing - ie creating shareholder value. I am sure the board of Slater & Gordon mean well, but they seem to have been completely out of their depth when it comes to making a major acquisition and taking on huge amounts of debt.
If companies like NAB can't get it right, with all of their resources, why would a newly listed company like Slater & Gordon succeed (at overseas expansion)?
The word is hubris. The board of Slater & Gordon became filled with hubris.
hubris
ˈhjuːbrɪs/ noun
excessive pride or self-confidence.
"the self-assured hubris among economists was shaken in the late 1980s"
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