Given the recent pulling of the trigger by Align on a GM requisition at Ironveld due to what I perceive to be monumental errors of judgement by the 2 principals – CEO Martin Eales & Chairman Giles Clarke, a number of outright lies and defamatory statements have been put in circulation surrounding Align and myself on various forums.
Here are the realities:
1 – Align exists to champion small cap companies and we take a position through either stock receipt as opposed to cash, outright purchases in the market and also debt provision to companies – sometimes a mixture of all 3 routes. Our interest is then to see the creation of value within the company by incumbent management and ultimately to realise our investment.
2 – The average holding period for most of our investments is in excess of 2 years. Given our Top 3 shareholding position in numerous companies, we are acutely aware that exiting these “on market” is almost impossible and that trade sales/secondary placings are the most likely avenues of value realisation. What this means is that we have a real vested interest to see the company actually WORK and not for a short term temporary spike – contrary to assertions by numerous of our/my detractors.
3 – At the age of 49 and having been involved in this game for near 30 years I freely admit I have made many enemies. I have made these enemies as I have stood up for myself and what I believe is right. I have faced down each and every one of my protagonists and indeed the last party to tussle with me had a humiliating loss of face & serious six figure litigation costs. As the saying goes – if there is a God his name is Karma. Look at numerous of the companies where I have waged campaigns against what I perceived to be value destructive avenues – ADM Energy, Widecells/Iconic Labs, Anglo African O&G, Mayan Energy (as was) etc – what all these have in common is that our views were proved to be correct – management in these companies presided over continued value decimation for shareholders.
4 – When you take an “activist” role then it is a lonely place. The “City” looks after it’s own – the brokers, Nomads and lawyers coalesce around the “fee payers” – that is ultimately the poor shareholder but is of course disbursed by management. In effect, management use your capital against you to look after their own interests. It is not a myth to say that with many listed companies in the small cap arena, shareholders are perpetually at war with incumbent Directors.
5 – It is easy to throw scurrillous, defamatory comments, outright lies and propaganda from behind the (deemed) veneer of anonymity of bulletin boards and anonymous twitter handles. I (and management of certain companies) are followed around by rabid cowardice rancid rats that I/we have obviously “crossed swords” with over the years. I am known in the business for (metaphorically) “stabbing people in the front” not the back. I am proud of this position and sleep like a veritable baby with that knowledge aswell as being able to look my wife and others in the face knowing this fact. Cowards that stab people in the back and hide behind bulletin board and twitter handles must be devoid of any self respect and that is a further comforting factor to me.
6 – After near 6 years operating in the small cap space it has become apparent that the Plc cost “drag” for non cash generating companies is the primary element that causes conflict with shareholders. Morally I feel it totally inappropriate that certain of these directors take inordinate salaries for frankly nominal/little delivery. Going forward we are taking the stance that where we perceive this applies in certain of our large holdings to attempt to address this or, in the final analysis, ask management to move their bandwagon on. Watch this space in this regard.
7 – As u get older one becomes aware ever more of the “utility of time” as opposed to the utility of money – they in fact become juxtaposed once an individually has financially secured themselves. I am at that inflection point. My singular purpose in Align now is to ensure value creation in the large stake holdings we have and ultimately monetise. If we are succesful in this then all minorities will share in that. Contrast that with the situation of the Directors of many companies where their salaries continue to be paid/accrued and new options restruck at ever lower levels as those poor saps that pay their salaries (shareholders) and keep them in those positions get obliterated. With Align on board in certain Companies and through our policy of always voting against the Disapplication of Pre-emption rights u at least are in the company of an entity that is aware of this conflict and attempting to address it.
8 – People must remember that I do not run those companies – they are run by management. The actions management take at a point in time may be positive or detrimental to shareholders and that inclues Align/me. The major difference is that we (usually) have a communication line open to them and can try to influence. Again, the decision as to whether they listen is in their hands.
9 – To my haters and detractors – keep hating. Do yourself the damage. It means I have done something right & it amuses me.
Finally, for those twisted parties trying to cast doubt on my or Align’s financial position – in the immortal words of Mark Twain – “rumours of my demise are greatly exaggerated”!