This is the dog (for me) that each of us wishes we had never heard of.
$80 million dollars Loss, for a small cap, for 2015.
Even though I would like to not be too harsh, the only words one can really describe it with, is that it is a disgrace. It's also a disgrace that the directors and managers are still in place.
And it's hard to understand why anyone would be buying. The share price should really be nothing, and at best only a few cents.
You know how you have those stocks where management keeps saying they have made these changes, and those changes, but nothing ever improves in terms of the bottom line. Well, here's why they do it. I studied it at Uni long ago, and actually, there were some current directors of WA small cap mining companies in my classes back then.
There is a psychological art used by a number of CEO's to keep investors hoping, it's a well known technique, taught in University courses, and by marketing organisations (of limited repute usually). If you study these things you will get to recognise it. It's related to disguising failure by promising success, and packaging blame up as an event, deverting personalisation, and the various techniques used therein to do so.
They package up an excuse for incompetence, or continued failure, as an event - this is a wonderful technique employed by politicians as well, in order to keep power.
The technique is largely event based.
Event 1: we will be saved by having a uniform platform across all asia. (didn't work, so progress to event 2).
Event 2: we will be saved by repeated announcements of Strong Merchandising Pushes (SMP). (doesn't work, progress to event 3).
Event 3: we will be saved by having VIPShop take a 10% investment in our company. (doesn't work, progress to event 4).
Event 4: we will be saved by a consolidation/split of the company shares. (doesn't work, progress to event 5).
Event 5: we will be saved by opening up the platform to marketplace sellers (won't work, progress to event 6).
And so we now wait for the next change event (or packaged excuse, if you like), after event 5 doesn't work either.
Ad Nauseum...
You get the idea.
But the ultimate insult to intelligent people, is the final justifications for "all" these events, and that is always the same, by every company that practices them, and by every CEO that says them, ie. "... it is necessary to go through these unpalatable and difficult changes in order to make the company successful..." - which is a crock of rubbish - it's what's called spin.
Watch for the next packaged excuse.
If I was a guessing man, I would say that it will be something along the lines of "... E88 is going to conduct a strategic review of operations...". Oh wonderful, more hope for the investor!
Which will then lead to a further event, as in "... E88 has decided to rationalise by country, closing down (or even promising to sell) the systems in countries that are underperforming...". Yawn.
And so it goes on... and on... and on.., until stark reality eventually, and belatedly, occurs.
One can get a degree in spin doctoring, many ASX directors do it, particularly in the small cap mining sector in WA, moving from one company to another after each fails. The same names pop up everywhere, like a web of spin, and the wording and technique is nearly always the same.
There is a simple fact here. And that is, there needs to be wholesale change at E88, it cannot survive losing $80 million dollars a year, and if it continues like this then there will be a sudden left-field announcement of company administration - no doubt. That change involves a complete replacement of leadership, no half measures.
Acorn capital were smart, they saw the writing on the wall and exited in September 2015, which more of us should have noted more seriously back then.
Gw
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