Times article - the text (about LSE bulletin board)8 Oct 2019 04:07
Grab the popcorn.
It’s the lead article in the Business section.
Heading: Shut disgraceful online forums, says Sirius boss
Call for City watchdog to investigate bulletin boards.
Emily Gosden
12.01 a.m. Tuesday October 8 2019
Online shareholder chat forums are a “disgrace” and should be shut down, the boss of Sirius Minerals has claimed.
Chris Fraser said that the Financial Conduct Authority should investigate the bulletin boards where retail shareholders in Sirius and other companies discuss their investments.
Sirius has about 85,000 retail shareholders, some of whom have said that they have invested life savings in the North Yorkshire fertiliser mine developer.
“No investment adviser with a licence would tell you to do that,” Mr Fraser, Sirius’s chief executive, said, suggesting that some had been poorly advised after turning to the online forums. “They have these people sitting in their basements in their sweatpants, giving them investment advice — unregulated, unlicensed — and people follow them.”
The most prominent online share forums are London South East and ADVFN. Investors post thousands of messages a day, sharing details of their share trades or investment rationale and speculating about a company’s future.
Sirius Minerals wants to develop a huge mine under the North York Moors to produce polyhalite for use as a fertiliser, transporting it via a 23-mile underground conveyor belt for processing on Teesside.
The FTSE 250 company is one of the most popular equity investments in Britain with retail shareholders, who own almost half of the company. Its future is in the balance after it was forced to abandon a $3.8 billion financing plan last month when a crucial $500 million bond offering failed, sending its shares sharply lower. The afternoon before the announcement Sirius’s shares fell by more than 10 per cent. Mr Fraser said the company believed that this might have been triggered by a post on an online forum that falsely claimed it was about to announce an equity-raising. “Should the FCA be investigating? Yes, they should be,” he said.
The Sirius chief, 45, said it was “deeply concerning” that regulators did not address the forums where people were “holding themselves out as experts and giving investment advice”.
Mr Fraser said that he had “stopped reading [the websites] because they’re pretty depressing. You just feel so sorry for these people who’ve clearly not taken investment advice.”
He urged retail shareholders to “go and speak to a professional, otherwise it is gambling”, adding that no professional adviser would tell someone to “invest all of your money, all of your pension and everything you have in a stock like this”, which was a “high-risk but high-reward potential venture”.
Continued (there is a word limit per post and the article extends it).
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