With both Bellamy's Laura McBain and Primary Health Care's Peter Gregg hitting the fence last week, not to mention federal health minister Sussan Ley, January really has developed the whiff of a killing season.
And that was before 5:06pm on Friday, when the Board of liver cancer biotech Sirtex Medical announced it was terminating long-serving chief Gilman Wong over his trading in the company's stock.
Last month this column raised questions about Wong's October 27 sale of 74,968 shares (netting $2.14 million at an average price of $28.48) just two days after Sirtex had re-affirmed its FY16 forecast of double-digit sales growth. Wong's explanation, (on his third attempt) that he did so to pay a tax liability, jarred badly with investors.
And not six weeks later, on December 9, Sirtex issued a downgrade to its forecast sales growth from double-digit to "in the order of 4-6 per cent". The market responded by wiping 37.2 per cent (or $536 million) off its value in one session.
The day (December 12) Wong's share trading appeared in Rear Window, the ASX sent a "please explain" to Sirtex. The Board then appointed corporate lawyers Watson Mangioni to investigate Wong's transactions. The findings, we were told on Friday evening, are privileged and confidential. Given the outcome, they're also self-explanatory!
It's a spectacular fall from grace for Wong who in June 2005 assumed the helm of a minnow with a share price south of $1.50. They closed (calendar) 2015 seemingly unstoppable at $40.05. Like McBain, not so long ago Wong's name was being uttered in the same breaths as market darlings like Domino's Don Meij.
In this specific bloodbath and in the broader CY16 selldown, Hunter Hall's headline-grabbing Peter Hall had the value of his stake (6.7 per cent of the register) savaged, partly attributing that to his shock summer exit. Perpetual's former deputy head of equities Nathan Parkin was also a believer, holding 9.2 per cent as recently as November 10 (PPT has sold down the stake below substantial since Parkin's departure – another Christmas surprise). AMP lodged a substantial shareholder notice on Friday less than two hours before the Wong verdict – the kind of timing AMP is famous for.
But even before Gilman's garrotting, Sirtex closed the week trading at an earnings multiple north of 22, so Monday morning promises to be redder than … Bob Marley's doobie flame?
