Tuesday, May 5, 2009/
While I agree that the article failed to be clear on the fact CommQuest has not yet been placed in receivership, I think confidence in the company was non-existant well before the publishing of the Age/SMH article and doubt people will be debating the true meaning behind collapse. If you were part of the CQU prospectus then collapse is actually a fitting word. I see the same impact had ‘disaster’ been substituted. Having said that I take your point and the Mayne article drawing the conclusion is wrong.
The true collapse of CommQuest in my view in my view was CommQuest’s inability to be honest with the market. Whether this was intentional or just a case of amateurs out of their league I am not sure, but it certainly hits a sore spot when you hear Will Scott getting angry at misleading statements as CommQuest seem to specialise in this area. We have the promised dividend withdrawn without notice, the ‘phantom’ profit upgrade, which turned out to be a downgrade, sending CQU to a about a quarter of the price it floated for (well before the real global crisis kicked in too).
Following we have even more unrealistic profit projections, reassurances that all is good and the final straw for me, a mere two weeks before the debt covency with ANZ is breached, a statement about a share buy back which was never mentioned again, and given that fact you have to suspect a) it was to push up the price – which it did 4 fold, or b) the executives had no idea just how bad there company was going! It’s really hard to believe given the professional outfit they sold themselves as.
Now as an investor I disclose a bucket full of sour grapes here and really hope CommQuest pull this together, however I equally do not like to read that William Scott (and the other directors I hold equally responsible) feel they are given a hard time over this. They have dug the hole and therefore cannot expect their clothes to be clean.
For the record I think the Paris Hilton promotion was worth a punt, showed good insight and could have easily been a master stroke for CommQuest. Full credit there…