At yesterday’s Seven AGM in Sydney, executive chairman, Kerry Stokes departed from the written text to take a real solid crack at investment bankers and Wall Street.
In fact his comments are among the strongest so far from a local business leader about the impact of the subprime mess and credit crunch.
“A group of greedy bankers in New York took too much money and the rest of the world pays… particularly we in Australia,” Stokes told the meeting.
However Stokes said that Australia was “better placed to cope” with the fallout.
Stokes is certainly poorer as a result of the credit crunch and the associated sharp fall in share prices. The Seven Network was trading at its 52 week high 12 months ago — that was around $14.40 and Stokes had just over 40% of a company worth over $3.2 billion (over $1.2 billion).
At yesterday’s close of $5.26, the company had a valuation of $1.038 billion and according to a substantial shareholding notice lodged late in the day, his private company, Australian Capital Equity, owned 47.2%. That’s worth close to $500 million, so he’s down $700 million in market wealth, with much of that down to the impact of those “greedy bankers on Wall Street” who gave us the subprime mess, and then the credit crunch and freeze.
Seven has been conducting its second buyback in the past year and Stokes and his company’s holding in Seven has been rising steadily towards the magic 50% mark which he should reach before Christmas. Two substantial shareholding notices lodged yesterday by Stokes’ company showed he had lifted his stake by 1.2%.
Even though his hold on Seven is tightening, he’s worth considerably less as a result.
Some might argue that Stokes has to suffer the swings and roundabouts of investing: after all he did raise more than $2 billion from selling 50% of Seven Media Group to US buyout group, KKR. On balance, Stokes has been more of a beneficiary of the “greedy bankers on Wall Street” than a victim. But you can’t disagree with his sentiments.