Complete bollocks according to Woolworths who were forced into making a denial to the market. However, in the meantime, Myer’s share price soared more than 8 per cent on the “fake news”. So who started the rumour and why? Who gained from it?
Well the first place regulators should look is the intra-day share trading on Myer because clearly shares were traded and someone made up to 8 per cent gain in one days trading.
Unfortunately this kind of propaganda is nothing new and apart from the damage it does to retail investors and staff, it shines the light on the lack of due diligence done by contemporary media into the veracity of the content they are fed.
Arguably there are some sectors of the media industry that go even further in their thirst for content being accused by some of generating the “fake news” stories themselves. Again, nothing new but since Donald Trump made a thing about it more and more examples are becoming obvious of this trend that is doing little but undermining public confidence in our news outlets.
The basis of some semblance of belief in the Myer and David Jones scenario, is in the dubious claims that there would be gains made by combining the two.
Really? Somehow two underperforming retailers (each with a complex set of issues that need to be solved) added together makes one good retailer? Having personally been on the steering committee of a large scale merger, I can tell you it takes years to bring two different operations together, totally side-tracks senior management, creates cultural chaos and rarely if ever really realises the so-called ‘synergy savings’ claimed to justify the acquisition.
Both Myer and David Jones have problems – big problems that will take time, effort, money and patience if they are ever to be solved profitably.
So there is – as has been stated by Woolworths – no merit in the story.
So back to the original question. Who started this rumour and what did they gain or hope to gain by doing it?
Admittedly the Myer share price is ‘dead cat bouncing’ around historical lows so perhaps someone might be interested in buying it if it gets cheap enough but the acquisition cost is not the total cost of buying that business and its problems.
Perhaps a short-term bounce in the share price is enough to make a short term gain. But once the denials became official the market capitalisation fell back and there is no lasting halo for Myer.
For shareholders and staff, suppliers and financiers, hope springs eternal that a positive outcome can be achieved for Myer at some point in the future. But we really need greater diligence from our news media in fact verification and multiple source checking before we send everyone into counter productive spins in future for all that we claim is ‘news’.