There is a very old saying that Nero’s wife not only need to be above approach but also must be seen to be above approach.
With that in mind I noticed this:
Canaccord Genuity pushed Alcidion shares pushed ahead of raising
6:18PM January 27, 2022
Canaccord Genuity recommended clients buy shares in Alcidion less than a fortnight before it was named as the lead manager of the company’s $55m capital raising.
The equities research note – titled “Finger on the digital pulse” – was distributed to clients on November 24, placing a 42c per share price target on the health technology company and flagging the potential for “new contract announcements and expansions”.
On December 7, the company put its shares into a trading halt and said it would provide an investor update about a capital raising.
At the time, Alcidion shares were trading at 34c. On Thursday, shares rose 1c to close at 24c.
An investigation by The Australian has revealed numerous instances where Canaccord – which runs one of the country’s most active investment banks specialising in smaller companies – has made share recommendations to clients without explicitly disclosing there may be a conflict of interest. Earlier this week, The Australian reported that Canaccord had placed a “speculative buy” rating and published a highly favourable research note about Eagle Mountain Mining eight days before the copper explorer said it was undertaking capital raising – which was being conducted with the assistance of the bank.
Canaccord firmly denies that its work with companies has any influence over the content of its research notes, used by investors to decide what equities to buy, which are expected to be entirely independent.
In a statement on Thursday, Canaccord said its research analysts were “completely independent from its sales and investment banking operations”.
“This independence is reinforced by information barriers and compliance systems designed to separate research from other parts of our business and manage any conflicts of interest that arise.
“A research analyst would have no visibility over any discussions that the investment banking team would have on a proposed capital raising,” the company said.
Canaccord added that its information barriers and disclosure practices reflect those of other integrated global investment banks.
Lots more comment here from regulators:
Before other comment I needs to be noted that, as of the end of November the shares were trading above 30 cents – and that after all the goings on – the raising and very recent results- the shares closed at 24 cents on 28/1/2022– so not a great recommendation so far!
This price is just below the institutional issue price of 25 cents. It is worth noting that the shares were about 50 cents on June 30 2021. So far some shareholders are rather in the red!
My worry with all this is how someone who wants an investment in Digital Health can possibly come to understand the motives and forces that much be happening with all this, and be confident of their investment.
It is the sort of goings on here that are sure to ensure the ‘mug investor’ may be well advised to stay clear – despite the fact that Alcidion, on its fundamentals, looks to be a more than worthwhile investment prospect.
This small end of the market needs both much more disclosure and supervision to make it fair for all and to make sure no ‘hanky-panky’ is undiscovered!
Nothing here is to suggest anything is amiss here but what has gone on and what disclosures where provided possibly could be bit more fulsome and transparent.
What do you think?
David.
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