Sirius Minerals Chief Executive Chris Fraser has been quoted in The Times as saying that “They [bulletin boards] have these people sitting in their basements in their sweatpants, giving them investment advice — unregulated, unlicensed — and people follow them.”
And whilst that is undoubtedly going to be true of some people (I daresay I have perused a bulletin board in my jogging pants at some point), it is certainly not going to go down well with the 85,000 retail investors in Sirius’ stock, many of whom will actively engage on bulletin boards.
To be fair to Chris, he also says “No investment adviser with a licence would tell you to do that,” in reference to investors who have invested all their capital in a single stock. And it’s a comment I whole-heartedly agree with. But Chris’s apparent disdain for bulletin boards seems to smack of trying to shift the focus on bulletin boards rather than his own failings.
Why wasn’t Chris lambasting bulletin boards when they were awash with optimism and the stock price was above 20p? Did he assume that bulletin board punters were suited and booted, or regulated, and that they did not live in a basement? Unfortunately for Chris, he is realising that, as the CEO of a public company, he is both responsible not only for successes of the company, but its failings too. And people are always going to have opinions – sometimes ones you don’t agree with. The comments will particularly sting given that he takes home a salary of £486,400, and a total remuneration of £971,000.
Source: Sirius Minerals Annual Report
You’d think that on this package, Chris would have better things to do with his life, but he has “stopped reading [the websites] because they’re pretty depressing. You just feel so sorry for these people who’ve clearly not taken investment advice.”
It’s the people who have bought Sirius Minerals stock I feel sorry for.
He also shared the opinion that retail investors should “go and speak to a professional, otherwise it is gambling”.
Actually Chris – it’s pretty easy. One should think twice about buying shares in a company that isn’t self-sustaining and needs to continuously raise cash to pay exorbitant salaries. Like yours. That way, one can minimise the risk that one loses. Like almost all of your entire shareholder register, currently.
There are some incredibly knowledgeable retail investors and to just dismiss them as ‘gamblers’ is insulting.
Another quote I find incredulous is that Chris believes that when the company’s stock fell 10% the day before the $500 million bond offering failed, “that this might have been triggered by a post on an online forum that falsely claimed it was about to announce an equity-raising”.
I’m sure it had nothing to do with inside information being leaked, and everything to do with retail investors. Come on!
You can read the full article (behind a paywall) for yourself here.
Rather than bulletin boards, perhaps Chris should be focusing on getting financing, so the people who have followed him and placed their faith and money with him might actually have a chance of not being wiped out in an equity offering. We shall see if Chris has the minerals to dig himself out of this hole.
I currently hold a short position in this company.
Author Michael Taylor’s website www.shiftingshares.com contains numerous tutorials on how to trade and invest as well as his free book – ‘How to Make Six Figures in Stocks’.