Shortly after arriving in Australia in late August 2000, I witnessed the demise of iconic local company names such as Pacific Dunlop and Mayne Nickless.
Both conglomerates had been around for as long as most Australians could remember. Pacific Dunlop’s origin traced back to 1899 while Mayne Nickless was founded in 1886.
Pacific Dunlop had been a proud member of the ASX’s Top20, but by the time I arrived had shrivelled to a sick corporate entity struggling forth. Its legacy lives on through Cochlear (COH) and Ansell (ANN) today.
Underwear sellers Pacific Brands had also once been part of the great Pacific Dunlop. It was acquired and delisted from the ASX in June 2016.
The leftovers from Mayne Nickless are today incorporated into Mayne Pharma (MYX).
In my online presentations this month, I look back at those experiences from twenty years ago and tell investors it’s most likely time to ring the bell for two other iconic Australian brand names; AMP (AMP) and Telstra (TLS).
It is my observation, the boards of these two companies have come to the conclusion a successful turnaround of the moribund business model is increasingly looking unlikely.
AMP is effectively waiting for a suitor to turn up and buy the whole lot, preferably cheaply priced, probably with a plan to unleash value through selling off parts of the failing financial services provider.
Telstra, it is already rumoured, is quietly preparing for a business split in two, three or four units, in order to -finally- unlock value for shareholders.
The latter process might still take two years from now, but it seems the inevitable outcome for the former government-owned telecom monopolist whose main claim to fame is having destroyed billions of dollars in shareholder capital while promising an unsustainable dividend along the way.
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I don't think in the case of Telstra that it is all Telstra's fault that the company has fared so badly. The greedy Government sold off Telstra to the public at a high price ( particularly in T2 and T3, something like $7 ) as a monopoly asset, but since then the Govt and the ACCC have done everything in their power to remove Telstra's once monopoly status and make it easier for new smaller competitors. glad I sold many years ago at $5.50
But Telstra has 5G.
just last week on Livewire's Buy Sell Hold Top 5 was AMP!! I bought shares in it after reading it! Thanks a lot!
Different livewire contributors have different opinions on whether a company is a buy or a sell- sometimes they will be wrong , sometimes they will be right ! They aren't offering personal financial advice in these articles , it is the responsibility of the reader to weigh up all the facts before making an informed decision about buying shares.
I agree with Carlos above. Not long after the government sold off TLS to "mom and pop" investors around Australia, many of whom chucked them into their super or in the bottom drawer, a number of politicians (Senator Conroy) grandstanded, hoping to make a name for themselves on breaking up the vertical integration and monopoly of the 'big evil' Telstra... despite the fact that it was largely owned by ordinary Australian tax payers through the super and retail holdings. But hang on a minute... YOU sold US a vertically integrated company and that's where it's true value lay. Now you want to destroy the thing that gives it value? The govt should have broken it up before selling it off. After that TLS was doomed to struggle as just another retailer. This was just another case of the government redistributing (robbing) wealth from ordinary middle class folk who had neither the knowledge, experience or technical expertise to understand the machinations of politics and big business, and arguably should not have been sold T2 and T3 shares through big flashy, almost 'get rich quick' style ads on the tv, and for many of whom this was the first and only foray into the retail share market and were robbed because of it. Many T1/2/3 buyers still hold them quite simply because they don't even know how to sell them!
Carlos, the price of shares the Govt sold Telstra for were ; T1 $3.30, T2 $7.40, T3 $3.60. With T3 if you kept the shares for 18 months you received bonus shares, thus reducing an investors average cost to about $3.42.