The art of distraction13 Nov 2024 08:53
At one time it used to be magicians, pick pockets and con artists that used the art of distraction to create an illusion or make you part with your money. That morphed in retails sales techniques, like sweets at checkouts and inflated prices in the lead up to sales and of course one of the most prevalent of all users of distraction techniques - the politicians.
Then we have those that play the investment game - big money professionals who can apply shorting techniques or simply deal in such value and volume as to create the most basic of human emotions - fear and greed. Distractions.
How does that apply here at the moment? On several levels by several 'sets' of parties with the sole intention of making money, which is of course why we are all here - its just that the odds are stacked in the favour of the big money - expressions like money goes to money are for a reason.
So an opportunity arose from an RNSwhere as far as I can tell, the company and the auditor have a disagreement on an accounting principle relating to one or more accounting entries. Both the company and auditor are standing their ground and so they have agreed to get an independent review - I suspect as with most things that are not black or white (otherwise the company would have persuaded the auditor or vice versa), the outcome will be somewhere in the middle of the 2 stances. Maybe there will be some amendments to a P&L and Balance Sheet but is it going to be material on the activities of the company? I suspect not. There might be some short term embarrassment and maybe a change of one or two personnel and words about culture and governance and everyone moves on.
In the short term those versed in the art of distraction have changed the narrative to the share price and where this is going in the short term after an exaggerated drop following a fire side sale from an institution that appears to have their own internal governance issues on their investment decisions. Speculation on do they know something that the market doesn't - well given the extraordinary impact on the MC this is hardly going to go under the radar of the FCA and any subsequent enquiry into an orderly market with this stock. It is one thing for individuals or institutions to make mistakes and lose money and maybe their jobs - it is a very different thing to be acting on inside information and face severe financial penalties and the possibility of prison. Personally therefore I have discounted the latter as being improbable.
Consider also the wording of the RNS - it was very much a standard quarterly update until almost half way down when there was the section on the review and then back to business again for the remainder of the RNS. I would suggest that if the implications of this review were of the potential magnitude to warrant a 60% fall in the MCAP, then this would have been worthy of an RNS on its own rather than an element of a far broader quarterly update.
Watch for the hand in your pocket!
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