The sometimes eccentric views of John Hempton
A long time ago I wrote a blog post about rehypothecation with brokers. It is - unsurprisingly - relevant again. In some sense crypto provides fast-track learning as to why we have banking and broker regulation in the first place. The 1934 Securities Exchange Act and all that When you sign up to a margin account in almost all cases you pledge your securities to the broker with the ability for them…
One of the stories of the financial crisis is that the bankers that ran big institutions, who had billions entrusted to them, and who projected the air of masters of the universe were in fact buffoons incompetent at anything other than organising their own bonus. The air came out of financial markets when you realised you just can't trust anything they say. And most importantly you could not trust…
Dan McCrum - the Financial Times journalist - has released a blockbuster finance book - the story of Wirecard. The book is called Money Men: A Hot Startup, A Billion Dollar Fraud, A Fight for the Truth . Wirecard is - I think - the biggest fraud by dollar value and scale ever conducted in Europe. Whatever: just buy the book. It is really good fun. I do not agree with all of Dan's perspectives - or…
There are confirmed rumours that Swedish Match, a Swedish company focussed on oral nicotine delivery (snus, chewing tobacco and most importantly "modern oral") is in advanced merger talks with Philip Morris. I am furious. Swedish Match is about a ten percent position for my fund - and a core holding. We own about 1 percent of the company. The management lucked-in when they came up with what is in…
There is an article just out that Swedish Match is in advanced merger talks with Philip Morris at a price of about USD15 billion . At Bronte we own 15.1 million shares in Swedish Match - or about 1 percent of the company. We believe the future for Swedish Match is considerably better than the price reflected and we are not happy with this offer. We will consider our future actions. John Hempton
On Friday 14 August 2009, that is more than twelve years ago, I wrote a little blog post about a fraudulent oil company run by Mr. Massimiliano (Max) Pozzoni. The name translated from Italian roughly as "Mr Big Wells". You can find that blog post here . I was sure it was a fraud because they claimed in press releases that renowned petroleum engineer Dr. Daulat Mamora had consulted for them. This…
I accepted an invite on LinkedIn from a finance student at an Australian University. Nothing unusual about that. Said finance student then decided to pitch me a short idea in this case in the hope of getting an internship. Again nothing unusual. Indeed this is how about a third of our employees joined us. Just that this one was funny. So here goes. Finance Student (FS): John, you gotta give me an…
Grenke is a Geman listed (but global) equipment leasing company who has been subject to a short-seller research report (which Grenke supporters call an attack). Grenke was late to publish an annual report, but they indicated to the market a date in May (today!) when the annual report would be published. The question was whether - given the rather florid allegations - KPMG would be be prepared to…
Google Trends doesn't predict stock market rallies, well somtimes it does. But more likely it is coincident with them, the suckers at the end of the boom being the biggest (yet) wave of retail buyers. Here is a five year trend for the phrase "how to buy stocks" for the USA. It has two peaks, one at the height of the first COVID lockdown, and a second and bigger peak at the height of the…
Australia has several jurisdictional issues that make it a haven for corporate criminals. These features are sometimes for better, sometimes for worse, but they leave the securities regulator with a task considerably harder than any similar sized country. Feature one: compulsory privatised pensions (called superannuation) Australians are forced to save almost ten percent of their salary into…