Forum Archive Index - February 2000

["Alastair Bax" <bax@clear.net.nz>]

Probably a little late to add to this discussion, but I found a note I was looking for a few days ago when I read the comments. It is from James Cornell and his December Market Analysis newsletter:

 

One commentator rated Aquaria 21 as "Sell of the week"owing to selling by Eric Watson. We had thought such "personality cult" investing had died with the 1980's boom when investors bought Brierley, Robert Jones, Judge, Chase and Equiticorp owing to their "excellent management". In actual fact, Watson's trust has sold to one of his companies - so his beneficial interest in Aquaria 21 remains unchanged. We advise avoiding Watson's companies as he has a record of making money for himself, not the public shareholders. The latest example of that is the transfer of his Advantage shares (and those of other major Advantage shareholders) to a private e-commerce company. That private company will seek other e-commerce opportunities and may eventually seek listing on the NASDAQ - maximising the value of Watson's Advantage shares - not the value of Advantage shares owned by public investors who are excluded from such private deals. Although completely legal, there is also the conflict of interest in that Advantage and the private company will both seek new e-commerce investments. With the same management running both companies, and evaluating those potential investments, investors can but wonder which company will pick up the more attractivedeals? We, of course, can not comment on such matters