Years ago when I first started learning about investing in the share market, I remember reading, in one or other of the various books I had bought to teach myself about share investing, that the author observed that many large companies did not remain listed on the stock exchange. He mentioned various big name companies which, through mergers and acquisitions or bad decisions, disappeared from the ASX over the years.
I was pondering this over the past few days, when looking through my watch lists of possible share purchases and former share holdings.
The first company I invested in was Mayne Nickless in 1996. It was a logistics company which was about to divest its 25% holding in Optus, and which had a small side business in private hospitals. It ended up divesting most of its operations and becoming a pharmaceutical company – disappearing from the ASX entirely after a while, and then returning relatively recently as Mayne Pharma.
I think I learned a lot from the $1000 I bought in Mayne Nickless as my first investment. I had the experience of having actual share certificates for both the initial shares and the few which got issued afterwards during dividend reinvestment (share certificates are now a relic of finance history). I participated in the spin off of Optus shares – my first ever IPO. And I got to enjoy the ups and downs (mostly downs) of being a share market investor for the first time.
After about three years, I got rather fed up with Mayne Nickless and sold my shares. The company was going nowhere despite (or because of) all their many changes in strategic direction. Even looking now at it’s successor, Mayne Pharma, which only bears a passing resemblance to the company I once invested in, the business does not look like something I could rely on for the materially affluent lower middle class life I wish to maintain.
Besides, an investment which had dropped below the initial $1000 I had put in was not exactly a life changing sum.
Since that time, I have bought and sold (or been stuck in one case with a dud) many companies, and when looking at my investment history, it turns out that a lot of them besides Mayne Nickless no longer exist in their original forms, if at all.
Here, off the top of my head, are several of my past investments which have disappeared from the ASX board:
Southcorp (friendly take over by Fosters)
BRL Hardy (friendly take over by a US based business partner)
Fosters Group (take over by a foreign beer company – I voted against it at the EGM)
Australian Leisure and Hospitality (take over by Woolworths, and since demerged as Endeavour Group)
Broo (I have written about this one frequently in this blog)
Optus (taken over by Singtel)
Coles Myer (taken over by Wesfarmers and then remerged and refloated)
Harris Scarfe (whilst the business still exists, despite having been in and out of administration at least twice in the past 25 years, the ownership structure which was listed on the ASX collapsed around 2001 – thankfully after I had lost patience and sold out)
Robust Resources (a penny dreadful gold mining company which had been recommended by a stock broker in his column in the Herald Sun as a speculative buy – it did not pan out obviously)
Coca-Cola Amatil (formerly a tobacco company which reinvented itself as the local subsidiary of Coca-Cola – and then was taken over by the European subsidiary. Not a great investment of mine – it slumped from $13 to about $9 in less than a year before I bailed)
Ethane Pipeline Trust (taken over by its major shareholder during a share price slump – after I had bailed out at a loss)
Westfield (Westfield was a multi-decade success story which disappeared from the ASX after its founders, the Lowy family, decided to cash in and support a foreign takeover).
There are others. There was a period where I would take small punts on penny dreadful resource stocks – none of which took off and made me rich. [One of which, WHL Energy – a mistake from 2012 or so, has since reinvented itself through its using its listing twice as back door floats into totally new businesses.]
So even with really big names like Coles Myer or Fosters or Westfield, survival (or at least independence) is not guaranteed.
My takeaway is that share investing can be rather expensive when things go wrong, but it is fun.
Lost For Words! 