| Unprofessional reporting by Moneyweb on Platfields [message #45972] |
Sun, 15 November 2009 20:18 |
Georgeinvestcare 
Messages: 9
Registered: November 2009 |
Junior Member |
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Tis article was published in The Times
Quetions over Moneyweb price fall
Published:Aug 22, 2009
Black shareholders of media company unhappy and a block of
shares seeks the right buyer, writes Jim Jones.
What lies behind the 30%-odd collapse in the share price of
media-sector tiddler and website operator Moneyweb over the
past few weeks?
In July the thinly-traded share was pegging along at a virtually
unchanged 50c on AltX, propped up earlier by occasional
disclosed purchases by chief executive Alec Hogg.
Then at the month s end a small trade led to a precipitous fall to
33c, followed by an already- faltering partial recovery to leave the
share at its current 37c.
In contrast, the JSE s media sector has been reasonably firm.
Shares in Avusa, the owner of the Sunday Times, have slipped a
trifling 1% to R19.80, while those of Naspers, which has the
Media 24 publications stable, have been oscillating but have held
their own at slightly more than R230.
Nor, if markets get things right, was the crash a quick response to the past financial year s
shambolic performance
tumbling advertising revenues and the astounding deterioration of the
debtors book during the past year s first half.
Recent results show net current assets to have been in steady decline for some time and,
according to some media analysts, apparent advertising support is flattered by bulking up with
free display ads.
No stockbrokers seem to follow Moneyweb: where is the investor interest in a mom and pop store
that provides good living for mom and pop, but little for anyone else?
So finding an answer relies on local and Irish market gossip, as well as from rumblings in
Moneyweb s newsroom.
Not surprisingly, no one is willing to be quoted.
Prospective sellers do not want to risk knocking more off the share price until they have unloaded
their holdings.
And staff members who were offered share options in lieu of salary or bonuses do not want to fall
foul of the powers that be.
Still, it is rumoured that a comparatively large single block of shares is looking for a new owner.
It can only come from a few sources.
In October 2007 BEE company Isingqi Investment Holdings was backed by Mvelaphanda Holdings
in a 70c-per-share acquisition of 15.16 million Moneyweb shares, and 4.15 million shares were
warehoused by Mvela.
Some were new shares
Moneyweb badly needed fresh cash and here was an easy way of
raising it
but 3.8 million were delivered equally (1.9 million apiece) by Hogg and his newlyformer
wife and co- director Louise.
The stated reason for the Ho ggs sale was that Moneyweb could not itself issue enough new
shares to satisfy the Isingqi/Mvela purchase.
Generously perhaps, an offloading or sales opportunity was not extended to outside shareholders
as might have been the case with other companies.
Nevertheless, despite their selling, the Hoggs were left with a still-controlling shareholding of
fractionally less than half of Moneyweb s issued shares.
One presumes that their divorce settlement, which clearly split a jointly owned shareholding down
the middle, included a voting pool agreement on their shares. And this might imply a threat to
Alec s dominance were Louise to sell to an activist buyer.
Alec continues to run the company in Johannesburg.
He has been awarded some pretty hefty salary increases these past few years and his taxable
emoluments are bolstered by tax-exempt dividends.
One might wonder whether this explains the latest dividend declaration that is way out of line with
previous cover policies.
Louise has retained her well-paid board position, though she has been living in Ireland.
The BEE shareholders have virtually no influence on the affairs of a company which, unlike other
South African media companies, is almost entirely staffed by white people
this despite the black
empowerment that was crowed over after the Isingqi transaction.
Moneyweb s black shareholders have not been entirely happy with their investment s lousy
performance and their minimal influence over the company s direction.
Also, one hears, they are not impressed by an editorial line which pays scant attention to the
demographics of this country, and a news service on which a handful of original articles are
imparted a semblance of gravitas by being bulked up with Reuters wire copy.
But back to the shar es collapse. Fundamentally, Moneyweb has poor growth prospects, and
several futile attempts at diversification have owed more to precipitate decisions than carefully
considered strategy.
For the present, there is no control premium, so a large seller would need to find a buyer who
would not demand even less than the sort of price being quoted on the JSE.
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