Ed Borgato, trader, summed it up in pithy words: “Can’t think of a great CEO who panders to Wall St. When I see it, I lose confidence. Bet on business builders who aren’t seeking approval.”
Can't think of a great CEO who panders to Wall St. When I see it, I lose confidence. Bet on business builders who aren't seeking approval.
— Ed Borgato (@EdBorgato) December 9, 2015
Kiran Mazumdar Shaw, the promoter and CMD of Biocon, is not a believer in this logic. She believes that the management has to be proactive in defending the Company against negative reports while highlighting the ones that are favourable.
So, when Porinju Veliyath recommended a buy of the stock on the basis that it is a “great pick” and that it is his “high conviction bet”, he got rewarded by a retweet by Biocon.
Surprisingly, Porinju revealed in the tweet that he is “Holding in PMS & Prop” even though he had stated in his CNBC TV18 interview that he is “not holding” the stock. Perhaps, Porinju bought the stock after the interview on TV.
Why Biocon is a Great Pick:
My high conviction bet. Confident on @kiranshaw & @Bioconlimited
Holding in PMS & Prop.
https://t.co/l6ahQsnIf5
— Porinju Veliyath (@porinju) January 6, 2016
CLSA was, however, not as generous about Biocon as Porinju is. It recommended a “sell” of the stock on the basis that “The near-term pressure on profitability will continue” and that “Capacity constraints on the insulin business and high R&D cost are likely to impact estimated earnings in FY17”. CLSA has projected a target price of Rs. 423 for the stock, which is a downside of about 19% from the CMP of Rs. 522.
Kiran Mazumdar Shaw did not take kindly to CLSA’s ‘sell’ recommendation. She trashed the report as being “illogical” and reflecting “poor understanding of huge opp for Biosimilars”. “Axis has a “Buy” on Biocon on same” she hastily added.
CLSA "sell" report on Biocon is illogical n reflects poor understanding of huge opp for Biosimilars Axis has a "Buy" on Biocon on same .
— Kiran Mazumdar Shaw (@kiranshaw) January 6, 2016
Kiran Mazumdar Shaw’s eagerness in trashing CLSA did not go down well with some of her followers.
Anuj Singhal, the markets editor of CNBC TV18, who is known for his outspoken nature, was openly critical of Kiran Mazumdar Shaw:
. @kiranshaw Kiran, in my humble opinion – not fair for a management of your pedigree to be rattled by a brokerage report.
— Anuj Singhal (@_anujsinghal) January 6, 2016
Her other followers were also not impressed by the outburst.
“there are always better things to do than gripe about the analysts’ viewpoint” @dipakdayanand said.
“Madam, being an intelligent person, u sud not react to brokerage report” @patsify complained.
@varbala drew inspiration from the legendary Steve Jobs: “dont recall Steve Jobs ever responding to analyst calls; with respect, if I were Biocon investor, i’d b concerned about tis tweet” he tweeted.
“Your view is right but act is not! Need not and should not comment upon each analyst’s views & TP. Certainly not when you are CMD” @amit_paprika added.
However, Kiran Mazumdar Shaw was not swayed by the criticism. She continued her belligerent stance and even attacked an analyst who said that “I have never liked Biocon precisely for this self praise from you always. U give me another example today”.
“I don’t like analysts like you who report without bothering to understand our business model” Kiran retorted.
@ashurathi and I don't like analysts like you who report without bothering to understand our business model
— Kiran Mazumdar Shaw (@kiranshaw) January 6, 2016
Now, we have to see whether Ed Borgato is right in his theory about losing confidence in “CEOs who pander to Wall Street” or whether Kiran’s pro-activeness will make her an “intelligent fanatic” CEO.
Lol. It seems like Ms. Kiran will go out to sell these biosimilars on the streets of western markets in black :P. Even The regulations for sale of biosimilars has not been finalised in the US. And she wants us to invest in her company due to the huge opportunity. Don’t see any cash flows from biosimilars if any till Fy19.
No doubt Kiran is a great woman enterpenure and country is proud of its daughter.She is a brave lady known for being vocal on all issues. But this a unique case of taking on analysts not having positive view on Biocon.No doubt she must be knowing Biocan future more than any body else and nothing wrong if Biocon can show good performance along lines stated by its CEO. But if she just reacted for any anticipation of lower performance by analysts, then in case of lower performance by Bicon,market may punish the stock more than it might desrve.
No doubt Kiran is a great woman enterpenure and country is proud of its daughter.She is a brave lady known for being vocal on all issues. But this a unique case of taking on analysts not having positive view on Biocon.No doubt she must be knowing Biocan future more than any body else and nothing wrong if Biocon can show good performance along lines stated by its CEO. But if she just reacted for any anticipation of lower performance by analysts, then in case of lower performance by Bicon,market may punish the stock more than it might desrve and taking down credibility of Kiran along with price lower.
great article.
very childish of her to react to brokerage reports and also re-tweet a buy recommendation. i never expected someone like her to do this. if i were an investor in biocon, i would be worried.
anyways never liked biocon and will never touch it
Immature behavior on her part…
I think she has missed out kind of feeling. 12 years back when Biocon got listed, it had top pharma market cap much higher than Sun, Lupin. Today they are not even there in top 10 I think. This missing out frustration is showing up in biosimilars push….
Well. Now u can c the share price of Biocon