Shooting the messenger at Slater & Gordon
Instead of blaming short sellers, shareholders should learn from the Slater & Gordon (ASX: SGH) debacle. Since I last wrote about Slater & Gordon (ASX: SGH) in July, its shares have plunged a further 82% (no, I didn’t short it). At last week’s AGM, however, instead of criticising management and the board and questioning them over the company’s accounting policies, strategy, and outlook, shareholders concentrated on blaming short sellers for their predicament. I think they’re wasting their time. With things having only got worse since the AGM – the UK has proposed regulatory changes that may drastically reduce the profitability of Slater Gordon Solutions (the rebranded Quindell Professional Services Division) – there are some good, albeit painful, lessons here for individual investors. 1. Cheap for a reason? Many investors think the price falls have been too severe and that SGH may be good value at current prices. All thing equal, a company is better value the more its share price declines but you also need to determine whether in fact all things aren’t equal. In other..... Full article here: (VIEW LINK)
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