Photon’s massive hill to climb
Graphs can, of course, be used to prove anything, but this one certainly tells a story about the stock market peformance of Photon, whose shares are currently suspended pending a capital raising.
As both The Australian and Sydney Morning Herald report today, the company – which owns some of Australia’s best known agencies – is in a trading halt while it works on another recapitalisation.
The Google Finance graph tells a dramatic tale of how Photon has been performing against the ASX for the last six months, and of the task facing new CEO Jeremy Phillips.
According to the Herald, the company may look to raise as much as $100m. It says: “A key driver for the need to raise funds is Photon’s obligation to finalise payments for the acquisition of a series of smaller companies.”
Amofng the Photon agencies you will have heard of are the likes of BMF, BWM and Naked.
Up to now, a major incentive to independent agencies to sell to Photon has been its willingness to allow them to retain their own cultures. The company’s plan to consolidate its 30 sites and streamline the company structure will inevitably challenge that.
I suspect Photon is going to be much talked about in the coming months.
Tim Burrowes
A key driver for the need to raise funds is Photon’s obligation to finalise payments for the acquisition of a series of smaller companies.
Linkedin
Business models based on aggregation of a series of small entities into a single structure has proven to be a very flawed approach.
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As an ex-Photon group employee I can attest that the attempts to retain your own agency culture in the face of the need to drive business for ‘the man’ is a gigantic fail. The reasons Photon were attracted to many of their acquisitions in the first place have now been put aside by the need to drive revenue. And clearly thats not working.
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i knew i should have sold my shares by now….
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BlueFreeway here we come…
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always thought it was structured like a pyramid marketing scheme
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new dude is smart. packer’s bought in. get some shares after new cap raising. cultures can still stand alone even after consolidation.
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