Dick Smith Electronics - the nerve

[bugeater (Marty)]

Once again - don't assume that because a former owner did really well out of selling a company which eventually failed, that they are somehow responsible. What did they do that made the company fail?

[PCH (Paul)]

Don't quote me as I'm not an expert, but I doubt many superfunds would be investing in DSE. Aren't they obliged to stick with mainly blue chip stocks - which DSE would never have been.

Just my thoughts.

Originally Posted by Chee

But on you main topic; yeah, you wouldn't trust them with a new lay-by, would you? The private Equity firm made an absolute killing on this and gave us all a lesson, if we needed it, on just how much a brand, employees, and customers mean, to those businesses that produce nothing of worth except profit. Disgusting.


Yep, including all the fund managements and supers, that piled into it when it was delisted.
Big losers are the mums and dads with super funds and those who bought into the story of a revitalized business.
It is just incredible, that it could relist at $2.00 plus considering Woolies could not make a cent after buying the business.
You have to ask, how the fund managements could believe that it is a viable, profitable business?

[MortonH]

No super fund should be invested so much in a single company that its failure would have a dramatic effect on the fund's overall financial position. Same applies to all investors in stocks - the risk should be diversified.

[AussieTrooper (Ben)]

Originally Posted by doppler

I think it was something to do with receivers owning the oil, filters and parts replaced during the service.

As for the gift voucher scam, you would think that there would be a criminal aspect to this if Dick Smith's were selling the gift vouchers after they had already begun planning for the "voluntary" receivership.

Nothing an opened oil drain plug on their floor couldn't fix.

(you might be pushing it out rather than riding it though)

[doppler (Rick)]

Originally Posted by AussieTrooper

Nothing an opened oil drain plug on their floor couldn't fix.

(you might be pushing it out rather than riding it though)

Don't worry he did suggest that they take their oil and stuff back and a lot of unmentionable things as well, but they wouldn't let him near the bike.

[The_bluester (Paul)]

Originally Posted by bugeater

Once again - don't assume that because a former owner did really well out of selling a company which eventually failed, that they are somehow responsible. What did they do that made the company fail?

Well, a pretty good start would be the former owners tweaking the books hard at the beginning, running the inventory down at likely a real loss but for a paper profit and then selling the business for a huge price tag, leaving the buyers with a very expensive business which suddenly turned out not have anything much to sell nor the profitability that was stated.

Buyer beware of course, what kind of business people spend half a billion dollars to buy out a "suddenly profitable" business that the sellers bought as a basket case quite recently for a song without looking a little deeper than next years projections? "Due dilligence" would seem to be a foreign concept.

The business may well have been terminal (And quite possibly was) beforehand, and what Anchorage did may well prove to be legal but it does not make what they did right.

[bugeater (Marty)]

Originally Posted by The_bluester

Buyer beware of course, what kind of business people spend half a billion dollars to buy out a "suddenly profitable" business that the sellers bought as a basket case quite recently for a song without looking a little deeper than next years projections? "Due dilligence" would seem to be a foreign concept.

It is buyer beware. No ifs or buts. This is how the game is played. Everyone should be slamming whoever bought into the IPO and afterwards, not the former owners. Plus the management of Dick Smith should probably get a serve too.

[multiweb (Marc)]

Originally Posted by doppler

I had a friend in Adelaide who had his (bought and paid for) motor cycle in a dealership for a service when the shop went into liquidation. They wouldn't give him his bike back so he hung around the shop for a week and one day when the roller door was up he ran in and grabbed his bike and rode off. They were going to get the cops but apparently once the bike was off the premises they had no legal standing.

Good on him. Extra points for stealing is own bike back.

[AndrewJ]

This is how the game is played. Everyone should be slamming whoever bought into the IPO

Or maybe slam the makers of the rules????? ( original concept? )
As i noted earlier, it is the govts of both persuasions that allow it toi continue and thrive, as they ( like their lawyer and banker mates etc ) get a skim off all the transactions before anyone else knows its going under.
We should be slamming the legislators for allowing things like this to happen to the general public, who dont have the ability to do the research reqd in most cases, and dont have the resources to seek legal recourse if they do get screwed. ( As that avenue now costs more than the losses for most people, unless a class action can be started ).

Andrew

[The_bluester (Paul)]

Originally Posted by bugeater

It is buyer beware. No ifs or buts. This is how the game is played. Everyone should be slamming whoever bought into the IPO and afterwards, not the former owners. Plus the management of Dick Smith should probably get a serve too.

I don't entirely agree. Yes the buyers in the IPO allowed themselves to be played for mugs, but you cannot absolve the previous owners by just saying that is how the game is played. They set this up purely in the interest of making a quick and huge profit at the expense of everyone else. As far as I am concerned very little separates them from scam artists attempting to diddle people out of money. It is interesting that it is apparently a problem to fleece people out of a few hundred bucks with something like the old "white van" scam where you represent a stereo worth bugger all as being worth heaps to get people to buy it for much more than it is worth but spend a year doing something not quite illegal to enable you to present a business that is probably worth fifty cents as being a bargain at half a billion purely to diddle people out of said half a billion, suddenly it is "buyer beware"

I guess I have too much of a conscience to ever work somewhere like Anchorage. Which brings us back to the OP, if they knew in the run up to Christmas that they were going to go into administration just after then the most recent management should go for a row IMO as it is outright dishonest and borderline for unconscionable conduct. If they had no idea then I suppose they are just incompetent. In that case it really is just a great demonstration of why buying gift cards is a risky investment

Who would buy a Masters gift card this week?

[AussieTrooper (Ben)]

Originally Posted by bugeater

It is buyer beware. No ifs or buts. This is how the game is played. Everyone should be slamming whoever bought into the IPO and afterwards, not the former owners. Plus the management of Dick Smith should probably get a serve too.

Really? You think it's ok to blatantly deceive investors?
You call it the 'game'. I call it fraud.

[bugeater (Marty)]

Originally Posted by The_bluester

I don't entirely agree. Yes the buyers in the IPO allowed themselves to be played for mugs, but you cannot absolve the previous owners by just saying that is how the game is played. They set this up purely in the interest of making a quick and huge profit at the expense of everyone else. As far as I am concerned very little separates them from scam artists attempting to diddle people out of money. It is interesting that it is apparently a problem to fleece people out of a few hundred bucks with something like the old "white van" scam where you represent a stereo worth bugger all as being worth heaps to get people to buy it for much more than it is worth but spend a year doing something not quite illegal to enable you to present a business that is probably worth fifty cents as being a bargain at half a billion purely to diddle people out of said half a billion, suddenly it is "buyer beware"

I guess I have too much of a conscience to ever work somewhere like Anchorage. Which brings us back to the OP, if they knew in the run up to Christmas that they were going to go into administration just after then the most recent management should go for a row IMO as it is outright dishonest and borderline for unconscionable conduct. If they had no idea then I suppose they are just incompetent. In that case it really is just a great demonstration of why buying gift cards is a risky investment

Who would buy a Masters gift card this week?

I think we need to agree to disagree on the Anchorage thing. But I suggest you consider where the capital comes from that Anchorage and other like it invest. In other words, who ultimately did well out of the whole deal?

I do agree that the gift card thing is rough. It's really more about consumer protection, which is somewhere I think legislation could be involved. The government could do something like force these to be treated as money held in trust (which is really the way people consider them) rather than an interest free loan to the company (which seems to be the way the law treats them). I still think they are pretty silly though.

[bugeater (Marty)]

Originally Posted by AussieTrooper

Really? You think it's ok to blatantly deceive investors?
You call it the 'game'. I call it fraud.

I'm going to back away, because I don't want to upset anyone. I think we just need to agree to disagree.

[The_bluester (Paul)]

Originally Posted by bugeater

I think we need to agree to disagree on the Anchorage thing. But I suggest you consider where the capital comes from that Anchorage and other like it invest. In other words, who ultimately did well out of the whole deal?

I don't really care where the capital came from, it is the purpose that the capital is used for that concerns me. Is it OK to make a killing on an IPO for a company which was pretty well pre destined to fail if you then go and use it to develop a world changing product? Fleece people to save the world? More likely IMO to use it to go and do it all again.

The entire basis of the IPO would have to have been "I hope we find enough suckers to fill this thing" and a successful float might well have seen the people at Anchorage celebrating with cries of "Come in spinner"

Safe to say that we are going to have to agree to disagree. I consider Anchorage to be an example of one of the things that is most wrong in the world, pure unadulterated greed and a preparedness to put other people in difficulties satisfy it and I find it contemptible. While my own employer exists explicitly to make money, we do at least go out there to provide services to go with it and ideally we want repeat customers, in fact we are servicing some now that were customers when I started seven years ago. Anyone who has been sold a pup by Anchorage lining up again? That would surely be a textbook example of "The stupid is strong with this one"

[Bassnut (Fred)]

Originally Posted by bugeater

It is buyer beware. No ifs or buts. This is how the game is played. Everyone should be slamming whoever bought into the IPO and afterwards, not the former owners.

Correct. A detailed Prospectus is required by law with an IPO and monitored by ASIC. From the ASX web site:

"The Australian Corporations Act contains a general disclosure test for prospectuses which, in summary, requires that a prospectus must contain all the information that investors and their professional advisers would reasonably require to make an informed assessment".

It seems whoever bought into the IPO and afterwards simply didnt do due diligence.

Technically, IPO fraud cant occur without lots of people ending up in jail.

[AndrewJ]

Gday Fred

It seems whoever bought into the IPO and afterwards simply didnt do due diligence.

Technically, IPO fraud cant occur without lots of people ending up in jail.

Agreed, but not many ever end up charged, let alone get convicted.
However, this thread isnt really about the people who "invested in the IPO" ( supposedly after doing due diligence research) in the hope of making a profit, its about how average mum and dad peasants can walk into a retail store and buy a product, and still get fleeced along the way, and the legal system doesnt give a rats about them.

Andrew

[doppler (Rick)]

What I don't understand is how when the gift cards still have a valid use by date and the company is still trading under the name on the gift card why they are not legally bound to accept that card under consumer law.

[AussieTrooper (Ben)]

Originally Posted by AndrewJ

Gday Fred
Agreed, but not many ever end up charged, let alone get convicted.
However, this thread isnt really about the people who "invested in the IPO" ( supposedly after doing due diligence research) in the hope of making a profit, its about how average mum and dad peasants can walk into a retail store and buy a product, and still get fleeced along the way, and the legal system doesnt give a rats about them.

Andrew

If the retailers knew that they were about to go into administration knowingly sold vouchers with terms they knew they could not meet, then surely that is fraud.
"What did you know and when did you know it?" would be the relevant question for them here.