So Allied Nationwide (the finance arm of Allied Farmers) is in receivership.
It became obvious many months ago that the Allied Farmers purchase of the Hanover loanbook was a deeply stupid thing to do.
It seems the only people who get to leave relatively unscathed from the entire Hanover mess are the people who caused it. I expect Allied Farmers will now fall over and leave a whole pile of investors (including many who got stung by their Hanover investment) out of pocket.
If I had shares in the company, I'd be selling them*. Even though they're already next to worthless.
This is one prediction I'd happily be proven wrong on, however. Because, as usual, the people who will suffer most will be the small investors.
If/when Allied Farmer goes belly-up, it will leave some serious questions to be asked about the level of governance of some of our companies. Can you blame people for sticking all their money in real estate when you consider the way some of these companies are run?
* Don't quote me. I'm not an investment adviser. Although some people in the investment industry would probably be saying "buy now!" Sigh...
Friday, August 20, 2010
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Commentators like Bernard Hickey should be called to account, too. He encouraged Hanover investors to accept ALF's offer. The man only has two ideas, and both of them are wrong.
ReplyDeleteIn your earlier post, Alan wrote:
ReplyDelete"How does the Hanover deal in any way reduce the likeliehood of Allied surviving?
I can see how it makes it stronger, but you are implying it was negative for the company?"
Would you care to comment on recent events, Alan?