By Colin Kruger
Is Australia's richest female CEO, Fone Zone founder Maxine Horne, getting a bit too rich for the likes of her business partner, Telstra?
That is what the sharemarket appears to be saying.
Shares of Fone Zone's parent company, Vita Group, have plunged this week after a leak of confidential negotiations about the "remuneration construct" between Telstra and Fone Zone.
The relationship, which involves running 100 Telstra retail shops, has been so lucrative for Vita that its share price had risen 500 per cent in just two years.
Illustration: John Shakespeare
But a letter of explanation from Vita to the ASX on Wednesday – about the abrupt fall-off in its share price since Friday – appears to have reinforced concerns that the company may be too reliant on Telstra for its own good.
Vita said that there was no information that could explain the share plunge, but it did say that – during a normal commercial briefing from Telstra on Friday with Vita and other Telstra dealers – there was discussion "in confidence about some potential changes to the remuneration construct, reflecting a number of market and commercial factors".
Once the impact of of these discussions can be reliably assessed, Vita said that it would update the market "if required".
Shares dropped below $3.50 after the announcement. The stock has now lost more than 25 per cent of its value since Friday.
Vita investors are obviously not taking any assurance from their chairman, Dick Simpson, who told the shareholder meeting on Friday that "as we look ahead, Vita Group is in a favourable position. Our relationship with Telstra is strong."
Horne's tweets indicate the meeting was well received by shareholders.
The good news for Horne is that the $49.5 million of shares she sold in September helped her escape some of the fallout.
She would have been $15 million worse off had she sold these shares on Tuesday.
At the time of the share sale in September, Vita pointed out that Horne remains the company's biggest shareholder with a 16.4 per cent stake.
Her remaining shares have lost around $30 million in value since Friday and are now worth $90 million.
Cheesed off
The stockmarket cops from the ASX obviously didn't waste much time on the Melbourne Cup on Tuesday.
Bega was another target over its shareholder meeting update last week from Barry Irvin, which has sent the share price plunging 30 per cent.
The ASX wanted to know when Bega's board knew of the shock news on just how much the infant formula joint venture with Blackmores had soured.
Bega said it first became aware of the market-sensitive information – the writedown of its inventory and earnings downgrade – on the morning of October 25th "when a decision to make that provision and to provide commentary regarding FY2017 earnings was taken by the Bega board".
Given this was the day of the shareholder meeting, it was decided the best way to to make the information available to the market was to include it in the chairman's address and release it to the ASX before the market opened.
Amped up
The AMP board obviously needed to show its colours after the writedown of its insurance business last week which triggered a share tumble and some rather narky analyst reports.
"AMP: A car crash in slow motion," was the title of a report from Bell Potter's AMP watchers which – just in case its subscribers had not got the message yet – added another subheading "shockingly bad".
"AMP has delivered a shockingly bad September quarter update which included asset write-downs, meaningful downgrades to underlying EPS (earnings per share) and a further rebasing down of the Life Company earnings," said the Bell Potter team.
So a troika of its female directors waded into the market on Monday, making substantial top-ups on their stakes in the shrinking wealth giant.
Catherine Brenner added 55,000 shares to her tally, Holly Kramer nearly tripled her stake with the purchase of of 33,000 shares and Vanessa Wallace more than doubled her share pot with 30,000 shares.
Other AMP board members are expected to follow, but obviously the ladies got their act together first.
The bad news is the trio are out of the money thanks to further falls in AMP's share price this week.
Got a tip? ckruger@fairfaxmedia.com.au