Is Tony Boyd accusing us of bringing down Dick Smith? I’ve had to slap myself three times but it’s hard to draw any other conclusion from this morning’s private equity puff piece in the Australian Financial Review.
For the record, I think a Senate inquiry is a waste of time and taxpayer money. Even at its over-inflated listing price, this was a $520m company that went bust. In the context of a $1.4 trillion dollar stock market, it is a drop in the ocean. Losing money is part and parcel of investing and the last thing we need is an inquiry and more red tape every time it happens.
But Tony Boyd (Chanticleer in the Fin) seems to think that, if there is someone to blame, the finger should be pointed at us instead of private equity firm Anchorage. Here are the two relevant paragraphs:
“Chanticleer knows that Forager Capital is regarded as the ultimate truth when it comes to the collapse of Dick Smith but it would be a useful exercise for the Senate to call the principals of that firm and ask them about the litany of factual errors in their much heralded report on Dick Smith.
The Senate inquiry also ought to call on Apple which was a major supplier to Dick Smith. The question to ask its management is this: Is it true that Apple management withdraw (sic) its normal trading terms and slashed them to cash on delivery after reading the factually incorrect Forager report?”
Firstly, if you are accusing a firm of “factual errors”, you should at least get the name of said firm correct.
Second, what exactly are these “factual errors”?
I’ve been waiting for a letter from Anchorage since we first published Dick Smith is the Greatest Private Equity Heist of All Time in October last year. Nothing. Of 127 comments on the blog so far, not one highlighted an error. Yet Tony Boyd knows something we don’t. I await further enlightenment.
Finally, and this is perhaps the most extraordinary insinuation made, apparently our blog post was the domino that brought the Dick Smith empire crashing down.
Let me get this right. Matt Ryan, analyst at tiny, irrelevant, mostly unknown funds management company called Forager, writes a blog post showing how private equity made a fortune out of the float of Dick Smith. Someone at US$500bn company Apple reads said blog post and, despite everything else being hunky dory with their important client, decides to “withdraw its normal trading terms”. That, and not the fact that the business was listed with a significant working capital deficit, is what brought Dick Smith to its knees?
I don’t blame Anchorage for Dick Smith’s demise. But, sure as hell, they had a bigger role to play than us.
For the record, we have never had an interest in Dick Smith shares, long or short.
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Forager Funds is a boutique fund manager specialising in a value investing approach. We offer an ASX listed Australian Shares Fund as well as an International Shares Fund both aimed at delivering returns for long term investors.