I love the way @crazypunter weaves with words. He's a true poet....

I love the way @crazypunter weaves with words. He's a true poet. Here is my own feeble analysis...

The Vocus management - led by Spenceley and Grist - disagreed fundamentally and irreconcilably with the M2 management over the company's direction. They moved a motion to dismiss the ex-M2 CEO and replace him with an ex-Vocus manager. When that motion was defeated both Spenceley and Grist resigned and sold their entire holdings in Vocus.

There are only two conclusions possible:

1) Spenceley and Grist wanted to continue to build and leverage their infrastructure investment and the M2 managers did not.

2) Spenceley ad Grist wanted to just utilise their infrastructure and focus instead on the retail business, and the M2 managers did not.

Which do you think is more likely? The men who built the high-margin, high-growth, competition-protected infrastructure now wanted to abandon their previous strategy with such strength that they could not countenance people who wanted to continue it? It's impossible!

Spenceley and Grist left because they would no longer be able to apply the skills they used to broker international access and provisioning, or to design and implement high-capacity intra- and transnational infrastructure.

Vocus may not suddenly tank in the next report but this change marks the beginning of a change in the company. More and more of its business will come from low margin, high volume, high churn, highly competitive retail mass market services. Even if the current management realise they've made a strategic mistake it's too late for them to do anything about it. The men who gave Vocus that capability are gone.

For my money, this is a sell anywhere north of $3. The only thing that will change my mind is a full year result under the new management, which means August 2018.