All that glistens for tech stock prima donnas

It wasn’t very long ago that short-selling of Fairfax and other print media businesses was the sad reality of investor sentiment. Now it’s the turn of the prima donnas.

SEEK, REA and Carsales reportedly are subject to heavy downside bets despite the presumption of careful market “guidance” by the companies involved.

Of course each of these stocks has a different driver, but all are heavily anchored in an Australian consumer economy that is, at best, drifting sideways. Most likely, investors are well aware that the days of easy assumptions of growth are over (as Seek found recently when investors discovered that all revenues are not equal when it comes to the bottom line).

What we have is the end of a long boom economic cycle and the tail end of the first wave of digital disruption. ASX short sellers are effectively betting against the disruptors. With this mood about, the coming full year reporting of quite a few companies could be very interesting.

About the Author

Michael Gill is Principal Advisor with ChangePond Technologies and Counsellor with global business advisory firm Dragoman.

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