Further unhappy news for Sirtex Medical (ASX: SRX) shareholders as the ASX slaps the company with a "please explain" letter, "following a tip-off" to the ASX.
Listings Compliance also unsurprisingly didn't like the use of "imprecise terms", such as "double digit growth".
Sirtex explained in its reply that its futures sales are inherently unpredictable with "no transparency on dose sales" and a "very short sales cycle".
The narrative fallacy allows investors to convince themselves that they understand highly specialised industries that in reality they have no experience in, and opaque reporting or inexact forecasts can lead to materially inaccurate calculations of a company's intrinsic value.
Last week it transpired that Goldman Sachs had sold done a big chunk of its substantial shareholding.
The CEO himself had dumped $2 million of stock only five weeks ago, which should probably have been a big sell signal.
In related news, Bellamy's (ASX: BAL) also saw its share price annihilated from a high of $15.73 to $6.68, and has now been suspended from official quotation. Bellamy's key execs (CEO and Chair) were also dumping shares at $14 in August. What a joke!
Just saw this epic spray from Motley Fool, which lists a dozen red flags and says that SRX has no credibility, and "only the gullible or misguided" would buy shares.