by Winslow Taggart
Mark Weldon did some great things with the NZX but under his stewardship, the NZX also degraded itself with a number of companies listed on its bourse.
Big listings that went bad like Feltex get all the media attention, but the other area that lets the NZX down is with joke companies that maintain an NZX listing when it’s pretty obvious that they are pathetic shells or fiscal three ring circuses.
Two good examples of this come from two very different types of mismanagement.
The first is that of Blis, a company that makes probiotic products. Priobiotics are “good bacteria” that help digestive tracts, prevent colds etc. Blis launched several years ago and proceeded to burn cash at a fearsome rate. Sales never took off like promised, and the share price has gone from just over $1 in late 2001 to 1c today. The supposedly very nice people who run Blis are scientists from Dunedin who have utterly failed to commercialise their product. It has failed as a company in its own right, and would be better to sell out to a health foods company who know how to market health benefits to consumers.
The second example is that of a financial advisory company called IRG, born out of the failed wheelings and dealings of Dorchestor Pacific and Viking Capital. IRG has announced just today a loss of $1.14 million, when it’s entire market cap is $1.55m! From a peak of 35c in early 2007, IRG is now worth 0.003c per share, in other words, less than a joke. IRG is ably chaired by some goose called Marvin Yee and run by Brent King, whose run-ins with corporate NZ are easily google-able, like this article here.
Putting aside the obvious point that people should be careful when considering investing in or using the services of a financial advisory firm that loses almost as much money in one year as their entire market cap, the NZX should really do the honourable thing and suspend this joke to at stop people from trading in something so pointless.
The NZX should bite the bullet and start notifying the joke companies on the NZX that if they don’t meet market cap, liquidity and fiscal requirements, they’ll be suspended. Here’s hoping Tim Bennett leads the NZX to focus on quality over quantity of listings.