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Tungsten Corp – “pleased to invite” two new non-execs. Hmmm, really?

By Steve Moore | Saturday 21 July 2018

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Previously writing on Tungsten Corp (TUNG) it was sack the board says Brexit loving hedgie Crispin Odey & bonkers company founder Edi Truell. Now a 3:22pm “Requisition Update & Proposed Board Appointments” announcement from the company…

This is that “the board of Tungsten is pleased to invite Anthony Bromovsky and Duncan Goldie-Morrison to join the board as Non-Executive Directors. Their formal appointments will be confirmed as soon as possible, subject to satisfactory completion of regulatory checks. A further announcement, including relevant details for Tony and Duncan, will be made at that time”.

Hmmm, “pleased to invite” hey? - that comparing to initially “the board regrets that this initiative has been taken at the moment that Tungsten has reached an inflection point”.

This perhaps as the current board’s jobs are now save for now – as the “pleased to invite” is with “following constructive discussions between Odey and representatives of the board, Odey has agreed to withdraw the requisition”. Odey adds, “we have long been excited by the potential value available to Tungsten's shareholders from the scale of its e-invoicing network and its impressive client register. We appreciate the constructive discussions we have held with the board to address our concerns”.

Hmmm. I’ve recently questioned how much operating leverage on revenue growth of the sort of 9% can be delivered and could the working capital position get tight? - and reminded of the Warren Buffett quote about whatever management tackles a business with bad economics, it is the reputation of the business that tends to remain intact. I’ll review again following results next week, but currently continue to avoid.

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