Pea and thimble trick ASX’s stock in trade

Peter Nicholson Margin Call cartoon for 09-02-2016. Version: (650x366) COPYRIGHT: The Australian's artists each have different copyright agreements in place regarding re-use of their work in other publications. Please seek advice from the artists themselves or the Managing Editor of The Australian regarding re-use.

New heights of prestidigitation at Elmer Funke Kupper’s ASX, which has mastered the somewhat disturbing magic trick of making unloved market announcements disappear.

The context is the December 16 IPO of Pipe Networks founder Bevan Slattery’s latest tech tearaway, Megaport.

Megaport bills is into “elastic interconnection”. Whatever that means, the market loves it.

Those who got into the $25 million IPO, run by Morgans, have made out like bandits, with stock priced at $1.25 now changing hands at a whopping $3.50.

At 2.49pm on listing day, Megaport duly filed a top 20 shareholder notice, listing Morgans’ James Macaulay, who worked on the deal, as holding some 1 million shares.

This was completely wrong: in fact, Macaulay was simply the contact person listed for the account at Morgans’ in-house nominee company, Berne No. 132, through which some 190 clients held shares acquired in a pre-IPO fundraising round.

At 9:58am the following day, Megaport put out a new version correcting the error by taking out Macaulay’s name — but, rather than issuing it as a correction, the company asked the ASX to replace the old one.

The ASX agreed. Transparency? What’s that? And the move backfired, provoking conspiracy theories about cover-ups among envious onlookers.

The chairman of Morgans’ advisory board, Roger Clarke, owns half a million shares.

Clarke, who used to chair Pipe, is among contacts recruited as investors by Slattery — presumably in an August pre-IPO raising at just $1 a share.

Other big names on the register include Goldman Sachs boss Simon Rothery and Internode founder Simon Hackett’s Hackett Foundation.

Blowing bubbles

Still with Morgans, who surprised some by snaring the majority mandate to run the upcoming IPO of Hipster Hitler t-shirt-selling tech play Redbubble.

Margin Call hears Matthew Grounds’ UBS was originally slated to run 75 per cent of the book, with Canaccord Genuity to handle the remainder.

It’s said the Swiss cheeses wanted the lot and Redbubble, led by former diplomat Martin Hosking, wouldn’t agree.

Redbubble ditched the Swiss and gave the big gig to Morgans.

While there’s talk Redbubble might be worth be worth $500m — what tech wreck? — it’s only ever made money once, in 2014, as it disclosed in October when it launched an employee share plan. The nearly unreadable accounts for the 2015 financial year show it lost $6.2m.

Medcraft snubbed

At least corporate plod Greg Medcraft’s failure to snare the equivalent gig in the UK means he won’t have to deal with London’s crazy house prices.

Medcraft, no doubt already familiar with sky-high property valuations from his former role as a councillor with Sydney’s cashed-up Woollahra enclave, was reportedly so confident of snaring the job as head of the Financial Conduct Authority he’d already started looking for London digs.

The snub, reported with only slight condescension towards the colonials by the FT, leaves Medcraft back in Sydney looking for another term as ASIC boss.

Many Libs think Medcraft too close to Labor, who appointed him, and his remark that Australia was a paradise for white-collar crime in October 2014 earned him a smack on the nose from finance minister Matthias Cormann.

The hard line against giving Labor appointments another chance blurred when Tony Abbott was disrupted out of the PM’s office by Malcolm Turnbull, but Medcraft still seems unlikely to get another go.

Banking on tech

There are more Aussie bankers passing through Silicon Valley than pilgrims through Mecca, if ANZ boss Shayne Elliott’s experiences are any guide.

“The first time we were checking into the hotel in San Francisco and who walks in behind us? The CEO of another big four bank,” he told a fintech get-together last week.

“I won’t say who it was. So we go to see Google and we’re in one of the meeting rooms and someone had left some business cards on the table. And who were they? Yet another big four bank.”

Elliott also revealed why he gave an impromptu speech at the Australian Open women’s final presentation to Angelique Kerber: organisers needed someone to fill time because they were engraving the runners-up trophy with the name of opponent Serena Williams, who they had expected to win.

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