Forum Topics EML EML Emerchants Ltd General Discussion
reddogaustin
2 months ago

Paypal just offered me a survey and for my efforts, a chance to win $1000 AUD in gift cards.

I dug through the terms and conditions, and the gift-cards are issued by EML Payments (bottom of the screen).

Always interesting to join the dots on who is what and what is who as an investor in the markets.

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AUROPAL
2 months ago

@Magneto is the expectation that this interest from Alta Fox will turn into a takeover bid?

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Magneto
2 months ago

@AUROPAL Alta Fox are an activist fund, so expect them to accumulates sizable stakes in EML to gain influence and persuades the board and management to enact their desired changes hopefully for the better. Alta fox recently unsuccessfully tired this with Hasbro the toymaker, it tried to challenge the board to spin off its Wizards of the Coast. 

 

https://www.reuters.com/business/exclusive-hasbro-set-defeat-alta-fox-board-challenge-sources-2022-06-07/

I no longer hold any interest in EML was a bit slow to sell out, in hindsight should got out on first sign of trouble. If I still owned it, I probably be holding see what happen with Alta Fox. 

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reddogaustin
2 months ago

@Slomo Thanks for prompting the board to get the recording online! What a watch!! I was swapping between laughing and crying!

Around the 1h10m mark is a great example of why specificity of language matters. The questions were valid - but Peter was able to dance around them because of the chosen words. It wasn't until another investor at the 1h22m mark chimed in with different specific words that we got an actual answer... which Peter kinda stuffed anyway. It went from "there was zero due diligence" *staffer passes note to the boss, classroom style* "ahem, there was, um, a sort of partial due diligence sorta conducted on one or two of the offers". #facepalm

There was another question asked by an upset shareholder around the 1h12m mark. Peter gives what I thought was a reasonable response, or implied one at least. If we don't like the way the board makes a decision, then we are free to sell our shares and leave, or we are free to vote those shares. While I agree with the sentiment of the question asker, at this level, there is a degree of 'If you don't like it, leave' that I think should apply to people own decision making.

There was an excellent question asked about succession plans around the 1h18m mark. Peter's response about Emma S was the only time I saw him with confidence in his answer, as seconds before when talking about Tom C he was unsure and looking for words to stay PC and on-narrative. Peter also makes a good point about leading the business into the future and payments experience, whilst helpful, may not be the make or break for a successful CEO for EML.

Across the video there is questions about why the buy-back has been paused (aka cancelled). At no point did management give a good reason as to why. A fascinating insight, that in person AGMs like this offer. You can see their body language squirm when they don't believe something or are dancing around something, or, don't know their job or the details very well at all. The clear difference in confidence of knowledge between Peter and Emma is astounding.

There was a great question about changing jurisdictions would fix their regulatory problems around the 1h43m. Emma impressed me with her response.

The last laugh, was when the final note was passed to Peter... uuuhhhh vote counting is taking longer than anticipated, so we'll release the results to the ASX, aka we'll save Peter some embarrassment. That was nice of them. BYE BYE PETER. hahahahaha.

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zebedee
2 months ago

Fascinating watch, the squirming was horrible to see. It really reinforces the value of in-person meetings, too easy to dodge on zoom.

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AUROPAL
3 months ago

It's not really surprising to see other regulators taking a look at EML after everything with the ICB. To be honest, I'd expect every regulator where EML operates to be taking a look to see if there are similar concerns in their jurisdiction.

EML management themselves should also have been expecting this.

However it is a further hit to sentiment on the business.

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Slideup
3 months ago

Yeah Auropal, I agree this is a ball that was dropped bigtime by EML management. I listened into the brief call update this morning and I am not ready to buy but I do think they will be ok and will properly address their internal processes and get back on their feet, it will just take a while.

There is a big contrast from the old CEO Tom Cregan to the newly appointed CEO Emma Shand. The impression I got was that Tom was very strongminded and happy to bend corners. I think he used the mushroom farmer approach to investor and maybe board relations - keep em in the dark and feed em on Sh#t. Which probably worked well when they were small and growing fast but definately got them into trouble when they bought PFS at what at the time looked like a bargain price.

I think Emma will genuinely fix the complience issues from CBI and UK and I think when this happens the internal policues and procedures will be in place that the rest of the world will be covered. The big question for me is how long will it take and what impact will it have on there margins given the extra cost structure that they have to create to ensure complience.

They are going to give a further update and issue FY23 guidance at the AGM.

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reddogaustin
3 months ago

Agreed. Another delay.

Another problem "solved" by hiring more management types. And management saying 'this sucks' but they are not chastising themselves!... maybe Tom C did need to go?

More noise to the long term horizon of the business. Not a structural issue to my mind, more perhaps a cultural issue the led to a lack of process shortcutting.

Super frustrating never the less.

I continue to hold. Mostly because chopping/changing my portfolio never works out. Stubbornly holding does.

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AUROPAL
3 months ago

The market reaction seems quite overblown. A 26% drop in value for something that is hardly surprising.

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