More company announcement woes
- Thread starter GreatPig
- Start date
ABC Learning's ambitious growth efforts at any cost have finally caught up with them. I've followed the company since listing and in the past few years they seem to have been addicted to growth by any means. Lots of borrowings and capital raisings that dilute the share register just to keep on growing by acquisition, all the while their ROE was dropping further and further. Sad to see this happen actually, given the need for decent child care. I just hope the company can sort its problems out while keeping their service standards high.
Hit a low of 1.15 today. Brave traders that got in at that price would've made a pretty penny today.
Hit a low of 1.15 today. Brave traders that got in at that price would've made a pretty penny today.
Lots of borrowings and capital raisings that dilute the share register just to keep on growing by acquisition, all the while their ROE was dropping further and further. Sad to see this happen actually, given the need for decent child care. I just hope the company can sort its problems out while keeping their service standards high.QUOTE]
I agree Ernie, ABC have improved centres they have aquired locally and I do hope for the sake of decent chilcare that they can sort this mess out.
I traded ABS for a while last year until concerns over the factors you mentioned told me it was time to leave it alone for a while. I am looking on in amazement at what has happened to it today. There must be some out there who are really hurting in the current market and of course many other brave souls doing quite nicely.
I am trying to learn all I can from the ups and downs for future reference. I may have actually had the b***s to buy ABS this morning if it weren't for my recent and ongoing stupidityin holding AFG, particularly as it is now clear that they lied about their debt obligations in their previous quarterly report. Once bitten, twice shy. I find it incredibly frustrating that companies can get away with such dishonesty.
Long live the mining giants ... they are keeping me well afloat in this stormy sea.
Louise
Hi Louise,
Have been in and out of ABS many times in the past, but have generally been positive with the company since listing. Even added it into my long term portfolio back in 05. Back then I thought it was a great company in a recession-proof business backed by friendly government policies. However, multiple capital raisings and debt-funded acquisitions started to sour me on the company, with the final straw being the sale of 10% (from memory, could be wrong) of the company to Singapore's Temasek Holdings. Not happy that the company kept diluting the shares when ROE was falling. Made me question management's intentions and when that happens I usually just get out. Sold my entire stake shortly after that at around $7. Boy am I happy that I did.
I suppose if you're a nimble short term trader it would pay to have a look at ABS. I, on the other hand, would not be touching it any time soon. Firmly on the watchlist though, as it may end up as a turn-around story eventually.
Got this off The Age. When it rains, it pours.
http://business.theage.com.au/abc-share-rout-catches-directors/20080226-1utx.html
AFG...ouch. Shenanigans at the top, when (if?) discovered, almost always lead to the share price being severely punished by the market. Hope you can get out of that one before it gets worse.
Glad to hear the miners are keeping you afloat. Woolies is doing it for me
Have been in and out of ABS many times in the past, but have generally been positive with the company since listing. Even added it into my long term portfolio back in 05. Back then I thought it was a great company in a recession-proof business backed by friendly government policies. However, multiple capital raisings and debt-funded acquisitions started to sour me on the company, with the final straw being the sale of 10% (from memory, could be wrong) of the company to Singapore's Temasek Holdings. Not happy that the company kept diluting the shares when ROE was falling. Made me question management's intentions and when that happens I usually just get out. Sold my entire stake shortly after that at around $7. Boy am I happy that I did.
I suppose if you're a nimble short term trader it would pay to have a look at ABS. I, on the other hand, would not be touching it any time soon. Firmly on the watchlist though, as it may end up as a turn-around story eventually.
Got this off The Age. When it rains, it pours.
http://business.theage.com.au/abc-share-rout-catches-directors/20080226-1utx.html
AFG...ouch. Shenanigans at the top, when (if?) discovered, almost always lead to the share price being severely punished by the market. Hope you can get out of that one before it gets worse.
Glad to hear the miners are keeping you afloat. Woolies is doing it for me
Erinie, I don't think you can get too much worse than 90% down. Only another 10% to go. What do you reckon? I will look harder at ABS. Just feeling very risk averse at the moment and I do not fully understand the ins and outs of financing and the potential damage of hedgefunds shortselling a stock. To buy now would be gambling for me. Others may be capable of making a more educated decision.
We must have exited ABS around the same time - I think I last sold for around $7.10. Today it is less than the list price.
Louise
'AFG is a financial services group that invests in a range of businesses and assets expected to generate above average financial returns. Operations cover niche financial products with core asset classes including aviation, shipping, rail, property, energy infrastructure and financial assets. The group specialises in asset origination and structuring transactions, funding and managing assets and management of specialised funds.'
This is what they said they do. Really they were just being very naughty and deceptive little people. Really, among other things they have about $2bn in debt to refinance in the very near future, brought forward because their market cap has reduced. Market cap is now only about $400m They have hidden this fact(debt) by not putting it in their last quarterly report. The directors had a stack of shares on margin and were forced to sell when the stock was heavily shorted. The structure of the company complicated and is not very transparent,meaning it is hard to find out what the big boys are up to. They had also recently purchased Rubicon Investments for what the market deemed too high a price, and there were conflicts of ownership... That is just my understanding of the situation (or at last part of it). Don't quote me on it. I am looking on with a mix of shock and amusement.
Louise
Hmmm, not advice but if I had AFG now I would be getting out. As you said, not much left but then whatever I can get now would be better than 0 (or worse, company stops trading and I can't sell to crystallize the loss). I'd take the hit, offset the loss against gains and move on to the next opportunity.
With that said, I don't exit fallen angels just because the price is down big. If the reasons for me getting in are still true, I will not sell. Of course, one of my criteria is good, honest management so in AFG's case my course of action would be clear.
Post-split (4 for 1), I think ABS list price is around 50c. Still 4x that price right now but then ABS was a completely different company when it first came onto the ASX.
Best of luck!
E
Just an old-timer's moment there Louise, thanks. LOL
I had, of course, been reading about Allco but having never followed bank/finance stocks the code threw me for a few minutes.
