Forum Topics Founder Effects
Slomo
Added 2 months ago

There's been a lot written about this in recent times and I'm reluctant to add more but ... I was thinking about the spectrum of entrepreneurial to bureaucratic. Between Mercenary and Missionary CEO's. Between humble and hubristic.

With this in mind - is it so surprising that the larger than life, egocentric, analyst baiting, self made mining billionaire Chris Ellison at MIN turned out to be more of a rogue than you would expect from an ASX100 CEO? Probably not? Surprised that he was enriching himself at the expense of shareholders - yes, surprised and disappointed.

Is it surprising that an ex-roadie for Aus Rock royalty and self made tech billionaire like Richard White at WTC ended up with an inflated ego and believing that amassing a harem of groupies would end well? Yes, actually but the Warnie of the ASX tech index was hiding in plain sight. Warning (if not Warnie) signs were probably there from his love of the spotlight and (over) confident presentation style. Didn't see his implosion coming at all though to be honest.

So which other ASX Founder CEO types do we think are ego driven enough to let themselves down in public badly enough to ruin their reputation, their share price, or their business?

Tony Walls at OCL does not seem the type to me at all, I would be very surprised if he went down that route. Seems calm, measured, sensible. A little aggressive on the business front at times but all within the rules of capitalism.

David Dicker at DDR does worry me a bit and I suspect the recent share price weakness may be the result of some worried that the AFR might train their sights on him when they get bored of MIN. DD does tend to run the business like it's his own personal fiefdom at times (see Dividend policy) and did recently park some funds in a DDR bank account from a share sale (over year end I think?) to rack up some interest. Also dresses like he has a messiah complex and generally carries on a like a bit of an evil genius. Definitely some ego here.

Sam Hupert at PME is rumoured to frequently swan around Melbourne in his red Ferrari with the top down, when he's not kicking back in the south of France but I do not think he is on the hunt for a midlife crisis. More likely he enjoys the finer things and knows what makes him happy without having to search frantically elsewhere. I hope so anyway.

Phil Britt at ABB seems very earnest and up front. He gets a bit snarky with Telstra on his socials and was aggressive when stalking SLC but I don't see him as an ego concern.

Aidan Williams at AD8 has made some missteps recently but I don't see much of an ego on display here. He seems very much in the mould of a techie engineering type that's switched into management and maybe still finding his feet. However, it's often the quiet ones you need to worry about ....

Aidan Tudehope at MAQ seems to combine an amount of aggression in expanding the business into high growth opportunities within it's capabilities with a conservatism around appropriate debt and equity raises to fund this while building a strong customer centric culture. No big ego issues that I can spot.

Brett Kelly at KPG has me a little worried at times...

Disclaimer: If this all seems a little heavy on the accusations and light on supporting evidence, I have been reading a lot of AFR column inches on this topic recently so some of that may have rubbed off.

Who have I missed?

Disclosure: All Held

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Strawman
Added 2 months ago

Great post @Slomo -- i think you nailed those assessments.

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Chagsy
Added 2 months ago

David Williams?

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Slomo
Added 2 months ago

For sure @Chagsy.

I would say he probably has the biggest ego on the ASX, but keen to hear from others.

David Williams at PNV makes PNV uninvestable for me unfortunately. Amazing product, great business, but with PT Barnum at the helm I fear I would not hear about any bad news until it was too late.

I suspect he is not genuinely dodgy or at the very least clever enough to not get caught. But something about him rubs me up the wrong way.

It's probably my loss, as he is clearly a passionate, experienced, well connected, smooth operator but I don't feel I can trust him - but weirdly that's not keeping me out of MIN, although the curtain has now been pulled back on circus at MIN and I feel it's more than in the price.

Maybe MIN has softened me up and I just need to do more work on DW Barnum and PNV so I am at least prepared for a pullback if / when it comes...

Hamish Douglas at MFG was another one but didn't want to include past 'characters' or it would breach the Strawman word limit!

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mikebrisy
Added 2 months ago

@Slomo ... PT Barnum is spot on.

My view on DW is not so much that there is anything concerning or unsavoury about him. After all, he has been a good capital allocator and changed out the former CEO with one who had the skills for the current and future phases of the business.

He is a maverick and his ego is an issue. There is no doubt he behaves like an Executive Director. Swami seems to be putting up with things, for now, and has good incentives to perform and appears mission-driven to bring the product to developing markets. He also strikes me as not a type-A CEO and therefore perhaps complements David.

My biggest gripe is I don't care for David's lack of clarity on reporting. Has he turned the tap off on record month reporting, or have there been no recent record months for 5 months, or both? He has been (deliberately) evasive on this. But then again, he said 1Q revenue is on budget, and he said that there is no obligation to report more frequently that every 6 months, indicating he doesn't want to inflict the burden on management.

He knows the monthly sales data, and if the trajectory was significantly off-track market expectations, he'd be obliged to disclose. I'm sure he doesn't want to face a class action for not keeping the market informed on material developments.

I've poured forensically over every word and nuance he has uttered in the last 6 years+, and never once found him to mislead. Be selective, sure, But never to mislead.

And although his apparent off the cuff remarks and "spontaneous live interviews" with staff at AGMs appear unrehearsed, there is obvious message discipline (most of the time!)

He also usually acknowledges correspondence I have with him - and I have no doubt he gets inundated from retail investors, so I try not to add to the burden.

I think that the uncertainty is weighing on the share price and it won't be resolved until we can see the next revenue numbers and compare these with market expectations for 2024.

I've done a lot of soul-searching over recent weeks as to whether I should have let this one go. However, the monthly volumes are pretty volatile, there's been no indication of bad news, and the consensus revenue growth is undemanding for FY25 compared with FY24. The clinical evidence is growing month by month, and Europe is starting to fire up.

My key red flags are:

  • Swami leaves
  • David sells down significantly
  • 1H product sales revenue growth is less than +25% to PCP
  • US sales indcates premature market saturation (compared with my model)


Beyond that, I've decided not to box at shadows. The $PNV rollercoaster is what you have to be prepared to accept if you have a long term thesis. I am and I do. For now.

For now, my thesis and conviction is strong enough that I can tolerate a maverick Executive Chairman. However, $PNV is still highly valued on fundamentals, so each half year brings a new moment of truth. It's a white knuckle ride. Kinda fun!

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