Great commentary on AIM @mikebrisy, Shapeshifter @Wini and others. Plenty to think about in relation to AIM and I just can't get it and this reporting week out of my mind.
A rare bird is CEO Mr Abrahams, with his white spectacles, teeth and dazzling talk. Easy to be put off by it all. And fair enough to be critical big talking CEOs given the two recent high profile examples of Chris Ellison (MIN) and Richard White (WTC). Both revealed to be very much lesser people than we were all led to believe. Along with them, last year we learnt more about the odious Brett Bandit from Woolworths (WOW), and the forked tongue Scott Diddles from Johns Lyng (JLG) . Strata companies' hidden fees, secret kickbacks and developer deals costing apartment owners - ABC News
And the septuagenarian shyster John Kelly from Steadfast (SDF) and his own special brand of strata scams. At least for his infamous 19th century forebearer there is no record of Ned having committed any white collar crime.
Or the now departed silver tongue thief from Qantas (QAN), who looted the place under the cover of espousing all and sundry social causes. Much the same playbook as the American George Tumble used at AMP 25 years ago. All the while Alan was smiled upon by his ineffectual Chair, Mr Goyder.
Or the criminal senior executive gang, serving the interests of Triad gangs at Star Casino (SGR). No wonder some investors are cynical, sceptical and pissed off.
You would hope the scammers are the minority and most CEOs are out there leading teams and genuinely working their backsides off in the interests of shareholders and the wider business. However the market this week does not appear to know what to make of it all. Neuron (NEU) was up around 6% Thursday and down 7% yesterday on half yearly reporting. And there was a lot to be optimistic about as revealed in the half yearly update. Including: stabilisation of Daybue revenue, 12 month patient persistence above 50%, Acadia hiring 30% more sales staff, market penetration of only 30% to date plus Canada and Europe opportunities being actioned + $359m of proforma cash + strong progress made with NNZ2591 + the pleasure of listening to the wonderful dedicated, smart and modest CEO John Pilcher. The share market’s twisted response was a up-down, buggered-if-I-know-what-is-going-on. Just what does the market expect? It to rain $100 dollar bills! Maybe investors are so attuned to looking for the early signs of failure / success and are so deeply cynical they do not fully consider that next to no businesses will travel in a straight line to success. (I don’t think this is a Strawman problem, with members just trying to collectively figure it all out.)
It was a similar up/down share market response for Tony Abrahams at AIM. I can’t understand and never will all the ins-and-outs of what AIM is up to and the risks being taken. Maybe sometimes it is enough to get a basic business understanding and then trust the captain. This flys in the face of the earlier examples, but what Mr Abrahams has done to date does not appear to have any elements of personal or business chicanery.
Starting a public company, and then as circumstances changed in 2021 putting it all on the line to pay $43m for the transformational EEG acquisition. Then executing on the US broadcast part of the business and with potentially much more to come. Pretty impressive. Mr Abrahams has a lot financially and reputationally at stake in AIM. And it may not all come to fruition as per his upbeat guidance provided mid last year of: “FY 2029 $60m EBITA and $150m revenue”. Even if he comes up 50% short, AIM is still not a complete disaster. That cannot be said for around 500 or so ASX mining related stocks where shareholders will in time lose the lot.
I asked Tony Abrahams in December after the 2024 AGM as to why he opened his mouth and announced the AIM 5 year sales and earnings targets. He did not answer my question directly, however said that it had an absolutely galvanised positive impact on motivating staff. Fair enough, I guess.
Like his biblical name-sake, maybe shareholders just let Mr Abrahams lead on a journey of faith through the unknown land. And like a later day Moses, maybe he can lead his flock to the promised land of milk and honey and a $60m EBITA (or better). Or from a secular perspective, believe in the likely apocryphal story of the little old Omaha spinster long since dead, who invested all he savings in Berkshire “….because she knew Warren as a little boy and liked him”. Making herself (or maybe more accurately all her surviving nephews and nieces) $20m or so.
Can’t help but think an investment in AIM (and NEU) will in time likely do just fine. We have all been burnt. Me so many times it feels like I have been cremated alive. But with some opportunities it might be best just to believe.