David Teoh, Links:
David Teoh quit TPG Telecom this week. It was announced on Friday morning - the announcement was titled, "Change of Officers" - click here to read it. The second page contains a letter from David about his decision. His son Shane Teoh, who was also a TPG company director, and was convicted at the beginning of this month of assaulting an Uber driver back in September 2019, has also quit, with both resignations effective from the previous day, being Thursday March 25th.
Another son, Jack, is staying with TPG for now, and has been promoted - he is filling one of the vacancies created by his brother and father leaving. David Teoh also has two other sons (Bob & John) who appear to not be currently involved with TPG. I have reproduced Teoh's letter in my updated valuation for TPG - I've lowered my target price now from $7.77 to $5.77, and I've sold all of my TPG (on Friday morning) and removed them from my Strawman.com scorecard also, at a small loss.
My main concerns are:
(1) This hasn't been an orderly transition, it is very sudden, with zero notice.
(2) Teoh owns 17.1% of TPG - over $2 billion (with a "B") worth of TPG, and he has said NOTHING about what his intentions are regarding those shares. If he was to start selling, or it got around that he was looking to sell down or out, then imagine the pressure the TPG share price would come under.
(3) Teoh is a genius and has been involved in at least a dozen start-ups at various times. TPG is just one of those, and the most successful one to date. He said in his letter that the time was right for him to "...step aside and pursue other interests." And he's taking his son Shane with him. Something's cooking.
(4) My IT (investment thesis) for TPG was based around Teoh, and it really doesn't stand up very well without him. It was all about what he has achieved so far, and his plans for TPG in the future, and he's now left the company.
(5) Soul Patts (ASX: SOL) own 12.6% of TPG and SOL's Rob Millner is on the TPG board as well. It will be interesting to see what Rob and Soul Patts do. They have made it clear in the past that their investment in TPG was all about backing David Teoh, and Teoh has now left the company, so does that change things for Soul Patts? Soul Patts and Teoh together own 29.7% of TPG.
OK, here's some links, firstly some history:
14-Sep-2019: https://www.smh.com.au/business/companies/inside-fortress-tpg-and-myth-of-its-legendary-boss-david-teoh-20190913-p52r1y.html
And now some reactions in the press to yesterday's announcement:
https://www.zdnet.com/article/david-teoh-steps-down-from-tpg/
https://www.afr.com/companies/telecommunications/teoh-son-quit-tpg-board-20210326-p57e9g
https://www.news.com.au/finance/business/technology/tpg-founder-and-chairman-david-teoh-quits-company/news-story/f2f1e726d0b65e35565b54de8337d3b4
https://www.itnews.com.au/news/tpg-founder-david-teoh-resigns-from-board-562640
https://www.smh.com.au/business/companies/tpg-founder-david-teoh-resigns-as-chairman-20210326-p57e8w.html
https://www.crn.com.au/news/tpg-chairman-david-teoh-departs-company-names-canning-fok-as-replacement-562645
https://www.channelnews.com.au/tpg-chairman-david-teoh-resigns/
My best guess is that TPG goes lower in the near term as both ordinary retail investors and brokers/analysts digest this information and start thinking about how it affects the outlook for TPG as a company and as an investment. I guess we will see shortly when the broker updates start flowing through.
