You may have seen my recent comments about the market announcement by The Environmental Group http://www.aspecthuntley.com.au/docserver/02463985.pdf?fileid=02463985&datedir=20211208&edt=MjAyMS0xMi0xMCsxMDo0NToyNis0ODArNTMzODAyK2FuZHJld3dlc3QrcmVkaXJlY3QraHR0cDovL3d3dy5hc3BlY3RodW50bGV5LmNvbS5hdS9pbWFnZXNpZ25hbC9lcnJvcnBhZ2VzL3BkZnRpbWVvdXQuaHRtbCtodHRwOi8vd3d3LmFzcGVjdGh1bnRsZXkuY29tLmF1L2ltYWdlc2lnbmFsL2Vycm9ycGFnZXMvcGRmZGVsYXllZC5qc3A=
I am bothered by the lack of transparency of The Board. Investors were led to believe that the results of the commercial water trials would be available at the end of the year. EGL must have been aware that the trial was going to be successful. They arranged a private placement of 27 million shares ($4.75M) to 'institutional and professional investors'. They claim that 23 % of this money was to commercialize this PFAS water technology. When everything was in place they made their ASX announcement of the successful water trials. This sent the stock up 31% and gave the institutional investors a windfall of $1.475M.
I'm afraid that small investors are being played for suckers by both Companies and their cadres of sycophantic institutional investors. I have let the Chairman know that I think this is against the spirit of a public company and it will destroy loyalty and trust among their longtime investors. From her response, it seems she thinks she can have it both ways. She can't. I still have confidence in the CEO of EGL as I believe he is ethical and competent. I think the stock still has some way to run but I will have no hesitation in cutting and running when the stock has reached fair value. Custodians of public companies need to know that public listing is not just a convenient way of funding their entrepeneurial ambitions. It cuts both ways. A company without trust will find itself in endless battles with its shareholders. This is not conducive to a partnership model. Institiutions share this responsibility too. By undermining small investors I hope they will one day reap the whirlwind. They will be undercut by their competitors and hopefully, a more enlightened investor public will resist their opportunism and profiteering.
I wonder if anyone has similar stories to tell. I think we should create a score for "Company-Investor Relationship' and this should be factored in when making our investment decisions.
Factors like: consistency, transparency, governance, and trustworthiness should be considered