Magnolia Petroleum and the danger of locking yourself into garbage
Five months ago, Tom wrote this damning assessment of Magnolia Petroleum’s (MAGP) business model and market capitalisation. So far, his view has been entirely vindicated. Despite the howls of protests from Magnolia’s ardent supporters, not to mention the absurd accusations I’ve read over the months accusing ShareProphets of being involved in a shorting conspiracy, I actually don’t think Tom went far enough in his criticism of this company. The business model is not clever and it is not shrewd. If you told American private investors about what this company did, they’d laugh at you. There is a very good reason why this company is listed here, with its American holdings, American directors and American headquarters. And I’m afraid to say that reason isn’t because certain British private investors represent the savviest money in global markets...
