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The Equitymaster Research Digest

Promoters Hate Analysts Who Don't Agree
Aug 17, 2016

A few days ago, a colleague showed me a disturbing video of a CFO forcing an analyst out of a meet.

Thankfully, this episode wasn't in India. As per Bloomberg, the incident occurred at the earnings briefing of Hong Kong-headquartered PAX Global Technology Ltd.

Why was the CFO so angry with the analyst?

In his defence, the CFO said that the concerned analyst was asked to leave because the company disputed parts of his report. Also, he was not invited to the earnings briefing.

But the real reason appears to be something else. It seems that this particular analyst was the only one of the 17 analysts Bloomberg tracks to have a bearish recommendation on the company's stock.

This probably didn't go down well with the management.

But the CFO's behaviour only created a big embarrassment for the company. In fact, some other major brokerage houses were quick to lower their rating on the company following the episode. The company's share price slid lower.

I read this morning that the CFO has been fired for his unruly behaviour. Call it damage control...a face-saving exercise...but we doubt if the CFO's reaction was just his personal vent and not a reflection of the high-handedness of the company's senior management.

We say that because we have experienced something similar.

The time we were interrogated for our 'Avoid' view...

It was early 2008...before the markets went into a downspin.

The markets were in a frenzy. At the height of this frenzy came the mega IPO of Anil Ambani-led Reliance Power.

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