Well, since it listed on ASX its become very good trading stock and that's presents good opportunity for long term holders to enter on days when shorts pile on.
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Did Jayne say something not going well or something to cause this 9%/10% swing this afternoon
She said she plans to sell most of the shares she will receive in her next tranche. Her excuse was tax obligations and completing the payment for an investment she made in 2016. The SP was at around $10.60 NZD when she said that so already on the way down although surely sped up a bit.
She says she will then hold her remaining shares and build a bigger stake from future performance rights.
I was actually quite impressed with her today up until this...
was doing so well in the first 2 hours...Mr Market didn't start reading the AGM preso until around midday was it? Maybe thought there was no need to read it as can only be fantastic so share price must go up 5+%
Once a trougher always a trougher. She has a long history of selling shares soon after they vest when at JetStar. Its the culture that she is setting for the company that worries me. I really liked Geoffery Babbage...he's gone and so am I. I think we could see some PE contraction but Bull's (Bear with a sore paw ?) outrageous comment is miles off base. I think this could continue to range trade for quite some time. Ideal traders stock. One has to consider the low base this has come off over the last few years and the fact that there's circa 13m shares still in management hands that cost them two parts of next to nothing.
At least she is being transparent about that. I give her that. I know its not great signal to the market, however I put blame solely on Board for structuring her package that way.
On a brighter note they're going to buy on market rather than issue new lot of shares, hence no dilution of earnings.
There is tension between two statements she made.
The forst was that she need to sell her next tranche of shares to fund existing obligations.
The second was that she has to me to work as a director / CEo and in the interest of adding capital value to shareholders.
Pre-existing debt obligations I understand. Now I'm no CEO but i figure there must be a number of ways of meeting that obligation. And it doesn't seem to make sense to me that you would "sacrifice" shares that a you are committed to increasing in value when you must have other resources to fund that obligation.
So what she is saying, essentially, is her ATM shares will be the cheapest way (best use of her capital) to meet the obligation.
(Disc - ATM I am swayed by their professional presentations and promises so remain a holder.)
Husband and wife team using the same nick:D
Twitter the other day
a2MilkUK (@a2MilkUK)
13/11/18, 5:44 AM
a2 Milk™ is on special offer in Tesco. Pick up a carton for just £1 and see if you, like thousands of others, love the difference.
Offer ends 20th November
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Very dissappointing that an otherwise good company result would be shafted by a pre-announcement that the CEO intends to flick her entitlement shares again in 2019 when they vest, albeit paid out by a share buy back. This beggars belief, have these muppets got no idea about managing investor sentiment?
There was one a time when employees were given stock in a company to ensure their interests where aligned with the outcome of the business. Now some folk just want to ditch stock to get cash asap, rock up late to the party (after the hard work was done) and demand a pay rise.
Someone is trying to milk this thing. If i were a shareholder, I'd be pushing for a vote to get rid of the cow.
I watched almost the whole AGM and the cold response she gave about selling her shares again due to "tax obligations" was just unbelievable... despite the whole media pessimism/sp drop on the previous selling,she just does not get it and why would you? Also the chairman spoke about how "difficult" was to get her on board as if he got the "kohinoor" of CEO's...i am still not convinced on the reasoning of not giving cash instead of shares(when you have a truck load and not being distributed...)
The last interview about her selling of shares on Bloomberg for "tax obligations"....
https://www.youtube.com/watch?v=lByBtCKM98s
For investors like me ...the sentiment sounds very negative and my patience is certainly being tested.
She's selling shares in August 2019- how does she know what her tax obligations are already. Isn't she on some sort of pay tax as you earn now?
There's lots of possible reasons other than PAYE tax obligations, but to forecast the CEO's intent to cash in her performance incentives for whatever reason so far in advance is just incredibly naieve, imo. She has shafted an otherwise good company result and this behaviour is vindicated by the Board and Chair! Good grief. I agree with the Beagle, the "optics" on this are really bad. They've screwed-up again, digging an even deeper hole that will dog them until at least the next performance announcement.
Have they no idea, this is basic stuff - a CEO or other insiders forecasting their cash-outs will always rock investor confidence. Without that confidence they have to outperform every quarter, right when growth performance would otherwise be acceptably declining as growth off a high base settles into a sustainable pattern.
I'm still invested but I am worried about how they will mitigate this appalling gaff. They seem to have no idea how to manage investor sentiment.
I voted no for everything yesterday. I still think Beagle should be CEO. But we got what we got, then on the other hand we know what to expect. What is lickers next payout...$2 or $3m?, and what was their profit again? Was it $200m or so? How much did they say they had in the bank $300m or so, correct me if i'm wrong. I don't agree with what the Licker has done, but $3m is not a drop in the bucket, probably more like a half a small cup in the bucket. I can live with a half cup, whether she deserves it or not is another story.
It's actually more of a bad reflection on the board than on Herdy. I mean those shares are hers and if she wants to sell them that is her choice. It is the board that issued these shares to her without any escrow so responsibility rests fully with the board. I think you have a board that has lost focus there. I would be looking for a refresh if this type of remuneration keeps being granted.
I am a bit disappointed in the final voting results. While accepting that they would all be passed I thought the against votes would be higher with the board members resolutions. The results don't reflect the dissatisfaction of shareholders in the company evident here and supported by reports in the media by various commentators. They won't learn anything from them, sadly.
hammer time today hopefully
Interesting article - US farmers doing the same as Fonterra in complaining about the A2 story and false advertising.
http://www.sharechat.co.nz/article/c...cer-group.html
Here is the link, basically ATM rejected their bid.
https://www.smh.com.au/business/free...31-gjbu5k.html
I watched most of the meeting yesterday, and it's hard to say the company is doing anything other than exceptionally well. Huge growth over recent years, and further growth on the way. Well managed and controlled despite obvious challenges with such high growth rates. Obviously there's some unhappy people out there who bought in at high prices, but that's not the companies fault.
Happy holder here, most of mine were bought at 60c or so, last package I bought at 8.50 and I'll buy more if prices get down to that kind of level again without significant news.
Thanks.
At one stage the dodgy Deans had a 19% stake in A2.
It would be interesting to know what they currently own.
Yesterday at the AGM the Trougher said that 30% of A2 investors come from outside Aus/NZ.
I have no idea of the 70% Aus/NZ split, lets say 50/20. Hence 80% of investors off-shore.
A takeover would be easy enough to accomplish.
Lots of discussion still going on re CEO shares sale - can I bring this back to basics re the shares she sold and going to sell. This is the way I see it.
1) Shares sold to date (80%) and the second tranche (20%) to be sold are those to reimburse for loss of Qantas shares
2) Board has accepted that in hindsight - cash may have been a better option
3)Shares are being sold to meet financial commitments made prior to ATM appointment
4) Indication given that ongoing performance shares will be accumulated
If/when performance shares are sold - then the discussions to date are more relevant. IMHO
Well put, the second tranche of sales when they happen next year would worth around $2m for her based on current price. Not even a pinch for a $7bln company.
People are reading too much into this and getting hung up. As someone pointed out which is lesser of evil, being open now about her intention to sell or knowing after she sold thro' a notice.
As I said before its not great look, but its not her fault blame the BOARD.
Purely academic I know, But how does a private person end up with a remaining $2m tax liability after paying 80% already of said liability. I'm presuming her ATM salary is greater than her quantas one. and at ATM she is getting paid $1.5m a year. Giving a tax liability of say $500,000 a year. - most of which will be deducted at source.
Correct, I got the impression that the money was predominantly to settle an investment decision she had made in 2016, i.e. she'd already committed the bonus shares quantas has promised, A2 matched most of her expected payout, she sold to pay off existing investment commitments. Obviously I don't know the details of the investment.
Presumably.
She knows what her investments are and we don't.
Could be that she has some investments that are partly paid and she knows when she has to pay the rest.
I have some that are partly paid and I don't know when the call will be - tricky sometimes to find $30-40k in a week or 2 when called but you invest eyes open.
Trying to move on from the CEO knocking..... here's what the NZ Herald says about the results.
Down to $9.85 half an hour after opening - those Ozzies sure know how to destroy capital.
SP needs a Trade Me non-binding indicative proposal.
Am looking forward to the HY results in about 12 weeks or 6 weeks after the Christmas holidays :D. Sp should be a lot stronger by then, or when shorters in Aussie get board with it.
When the Aussies get their surf board out?
https://www.youtube.com/watch?v=_cbsyUritIk
From twitterland a random call
Mark Lister (@MarkListerNZ)
22/11/18, 7:31 AM
A good day ahead for a2 Milk shares methinks.
Please note only gurus and awesome cool cats can make random calls on the A2 share price. Methinks it could be such a good day that 11 bucks is possible.
I've given it a lot of careful though anf have decided to put Herdlickers share sale behind me and move on. I've concluded it was essentially a poor Board decision and cash should have been offered instead. While I accept its not a good look I also have to accept it is her right to do as she likes with her own finances. In the end I have decided ATM is not Herdlicker. I remain of the view opportunities outweigh risks and this remains a solid long term hold. So for the time being I remain a holder, though a somewhat frustrated one at that. I'm now looking forward to SML's AGM (which unfortunately I wont be able to get to in person) and hope next week will end a bit more positively.
Goldman has released research today with regards to the regulatory changes 'China: New Cross-Border E-commerce policy: A clear positive signal to imported goods'. There was some more information released last night on the official Chinese government website that states that imported goods sold through CBEC will be viewed as ‘Personal Use’ items, and not require registration or a filing process.
It's all in Chinese so I don't understand it but Goldman is pretty positive.
IN part it says
"Although the news didn’t specify any time limit for the upcoming new policy enhancements, we believe the policy changes will largely lift concerns over the legitimacy of selling adult supplements, infant formula and cosmetics and other categories through the CBEC channel, at least in the near to medium term.It’s also worth noting that the new policy will increase the single transaction threshold to RMB5000 from RMB2000 currently.
........... Lastly, given that China authorities officially view CBEC imported goods as ‘Personal Use’ items, we see the government is likely encouraging consumer traffic to shift to the CBEC channel from the daigou (individual resellers) channel, and inconsequence will further tighten daigou sales (personal luggage or direct parcel shipping) under the new E-commerce law".
Seems this overhanging risk now is removed. Looking forward to a good day today.
Found the link out of China if anyone is interested http://news.cnstock.com/news,bwkx-201811-4301193.htm
It looks like I may get my shirt back on opening yay
Possible reason for some SP traction today. Looks like Chinese Govt will not be making feared changes to Daigou trading channel.
Attachment 10168
Where’s bull.... today?
Bit quiet without him
was busy this morning doing other things other than markets , but im back in front of my computer now laughing at the volatility in a2 lol i was out yesterday as i was thinking dow would be up last night as traders like to square up ahead of long weekends and theres an old saying on wall st about holiday week reversals.
anyway so glad everyones happy .
Oz initial impression good. AUD$20m traded already and SP currently at AUD$10.08 but all over the place
Just got off plane in Melbourne and massive A2 advertising presence on a number of outside billboards. Nice to see...
If I understand shorting and TA correctly a close over A$10 would make one want to close that short position right? Yesterday we had 0.52% of issued capital as short.
Will we see $11.00 again today? Seems like a long time between milky drinks.
The certaintanty of fundamental performance of ATM is worth more than the wildly schizophrenic behaviours of market participants and commentators.
Thank you for the free 10% swing trades.
A FORMAL UPDATE
https://www.nzx.com/announcements/327245
And a very good one at that. ATM SP was being suppressed because of the uncertainties around these regulations. That uncertainty is now removed so that risk is removed so its onwards and upwards once again. We can now go back to the detail provided at the AGM which was all good news.
SP currentyl $10.38 so I am more than happy to go onwards and upwards to $12.20. We can agree its not if, but when?
Market seems to think differently (currently up 3.8% for the day.
This is what ATM does. As long as the lows get higher and the highs go higher as well, its a roller coaster worth staying on.
I'd like it to go up, up and up, but don't think it will for awhile yet.
The announcement came out at 3.17pm. SP has been tracking South ever since.
I agree, this is what ATM does.
A2 icecream anyone?
https://www.nzherald.co.nz/business/...ectid=12164057
Before we all get too excited (again) - might be worthwhile remembering that the SP is at current still below the MA200, though admittedly - close.
Might be worthwhile to wait whether it manages to take off from the MA200 (and stays above, not just a brief flight finished by a rather unpleasant landing ...) - quite bumpy experience at the moment.
Question is - do we expect hype to take control again? I guess it is possible, but isn't it more likely that people will look into what is sustainable and price the company accordingly assuming a realistic PE and sustainable growth rates?
Fun data: backward PE (2012 - 2018) is 161; PE based on 2018 earnings is 38.5; forward PE (based on 2019 consensus) is 28 and forward PE based on analyst forecasts for the next 3 years is 25;
It is probably debatable, whether the current PE ratios (as above) are "fair", but if people talk about rising SP's, than they seem to think ATM is still too cheap?
What would be an apropriate PE for ATM in a time of PE contraction? And what sustainable growth for say the next 10 years are we assuming to justify this PE?