Asia Broadband Inc: A Shareholder Proposal Regarding Recent Events
Long/Short Equity, Contrarian, Long-Term Horizon, Portfolio Strategy
Seeking Alpha Analyst Since 2020
To the Executive Management Team and Board of Directors of Asia Broadband, Inc:
As a shareholder in this company, I would firstly like to express my gratitude for your attention to the matters that transpired on the 24th of February 2021. While I am confident Asia Broadband’s investigative and legal team will uncover the source of the malicious attacks circulated online, I, and many other shareholders, believe this was a coordinated effort by a handful of individuals, purposely targeting the company in an effort to recoup financial losses they realized through undisciplined risk management and untimely trading decisions of their own doing.
Sadly, as you are well aware, their predatory actions resulted in deep financial losses for uninformed shareholders who panicked at the misinformation campaign and divested their holdings at prices that do not, in my opinion, reflect the value of the company or its business prospects.
I have been a shareholder in the company since well before the growth in its public profile, and I have chosen to take a friendly activist role through open communication to management, and publicly advocating the strength of the business’s position in the marketplace. I believe it is a shareholder’s responsibility to be an ambassador for their business (equity) interests if they have the knowledge and platform to do so, and it has been my privilege to introduce the company to many investors who may not otherwise have been aware.
A large part of this advocacy has involved encouraging existing and new shareholders to treat their investments as just that—an investment. I have encouraged shareholders to understand the intrinsic value of the business operation, and to take a vested interest in the long-term growth of the enterprise. Part of knowing one’s business (equity) is knowing its value, and to be a responsible steward of one’s equity one must acknowledge when offers to “trade places” with aspiring owners are unacceptably low. Shareholders that sold amid the panic last week made a poor choice if the panic itself was their primary motivation for selling, and as this situation is remedied it is one they will need to live with—for better or worse.
By the same token, shareholders who remained vigilant and committed to the business also made a choice, and it is one we must live with. While many of us have suffered large paper losses, we still own the same equity position in the company as we did before the attack, and many new investors were even presented an opportunity to increase their position through artificially depressed prices. Moreover, the company’s generous decision to issue a restricted share dividend will augment the interests of existing shareholders and enhances our ability to participate in the business as it continues to grow. However, as I am sure you understand, the marketability of our interests has become impaired, and there is no way to know with certainty if the market will reach the same level of competition again (although, it is my persuasion the market will reprice the equity to a fairer value sooner than later).
Part of the reason the attacks of the last week were able to gain traction could, admittedly, be attributed to the company’s desire to seemingly keep a low profile. While I believe there are legitimate advantages to doing so—probably to a greater extent than I fully grasp given the political, legal, and economic environments of our geographic position—it is a reasonable assumption that the public disclosure of certain details could have derailed the predatory accusations made against the company.
While many shareholders would demand greater transparency to prevent these attacks in the future—and while I have expressed that certain details would indeed help with analysis and cultivating a more granular understanding of the business’s operations—I am hesitant to request transparency to the extent it impairs the company’s safety or competitive position.
As such, I believe there is an alternative way the company can satisfy shareholders who have been committed to the business amid these vicious attacks, while also enhancing our confidence in management and, hopefully, helping shareholders to feel more comfortable in letting the company have broad discretion over the selective disclosure of details:
In the company’s February 26th, 2021 press release, the company indicated it is “evaluating legal remedies to eliminate several recent defamatory and false information posts on public media platforms,” and, “accelerat(ing) an initiative to expose the parties responsible for these posts and take the necessary actions to mitigate and prevent these unacceptable behaviors.”
Given the severity of the allegations and the impact it had on the company’s share price, as well as the personal impact (harassment, reputational harm, threats) it has levied on many shareholders with visibility, I hope, to the extent it is prudent, the company makes an example of the responsible parties. If the company deems it prudent and cost-effective, it is my hope that the company’s legal team pursues litigation against the responsible parties and pursues monetary penalties to the fullest extent they are able.
My proposal to the company is that, if monetary penalties are successfully awarded, the company will consider disbursing all or part of the award to existing shareholders as a one-time special dividend. If selective disclosure is to blame for opening the door to these vicious attacks, but selective disclosure is necessary for the integrity of the business, I can think of no better way to demonstrate the company’s alignment with shareholders than this arrangement. We have been an advocate for the company during these times, and this act would surely convey the company’s advocacy to us—as well as reward shareholders who maintained conviction in the company during a time when many did not. It, in my opinion, would also be poetic justice to earn a compensatory judgment from those who tried to steal from the shareholders, and return the spoils to those from whom it was stolen.
This suggestion quite literally amounts to “buying time”, and I believe I can speak for many shareholders when I say this act of solidarity would grant the company, practically, cart blanche autonomy to continue operating the business with the utmost privacy.
Responses may be remitted to BlackbeardResearchReport@gmail.com, or, preferably, as in the past, via a public statement issued by Investor Relations.
On behalf of Asia Broadband’s shareholders, I appreciate your consideration of this matter.
Analyst's Disclosure: I am/we are long AABB.
I have 3,700,000 of Asia Broadband, Inc.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.