Hanging up on Telstra
I sat there mesmerized. Glued to the TV screen watching Australia’s Prime Minister John Howard getting badgered by a lowly news anchor from the ABC’s 7.30pm Report program. I am 30. That’s the only reasonable explanation I could come up with to explain why I found watching a TV reporter ask the country’s leader one stupid question after another, interrupting him mid-sentence and dismissing Howard’s replies as if the Prime Minister is a dumb chick named Paris Hilton, what I would call must-see TV.
Telstra is Australia’s largest phone company and is 51% government-owned. For years, John Howard has campaigned for its full privatization (selling all shares) citing ‘conflict of interest’. After all, the government can’t be in a position where it acts as the regulator of a telecommunications company that it owns. PLUS, that it would act as the regulator of that company’s competitors. That is the definition of ‘conflict of interest’.
But in the stock market, timing is everything. This week is bad timing for him to insist that the government sell its shareholding pronto. Not while Telstra’s share price is dropping like a stone. I’ve got shares in the bloody thing and I’m not happy.
The costly drama began one fateful night when Telstra’s head of government relations PR Phil Burgess said that he would not recommend Telstra shares to his own mom. The fact that his breath reeked of alcohol at the time was beside the point. PR Rule No. 1: Never ever tell other people that your company’s shares are so worthless you wouldn’t let your mom buy them.
Who knew a bottle of vodka would cost Telstra’s shareholders AUS$3 billion, on last count, and more? It doesn’t help that Telstra’s new CEO Sol Trujillo looks like a real-life, slightly taller version of Super Mario. I’m not hating BUT how can you expect someone to make the right decision about the running of a large company if he can’t even make the right decision about his moustache? That’s all I’m saying.
Sure Trujillo can blame Telstra’s likely demise on his predecessor Ziggy Switkowski, the unknown physicist who became Australia’s most celebrated and most profiled CEO. That was until it became painfully apparent that Ziggy’s Einstein brain didn’t do Telstra any good. To save face, the board dipped into the company’s cash reserves to pay shareholder dividends. Even if technically they weren’t supposed to because the company didn’t generate enough profits during Ziggy's reign to warrant the dividend payments. However, I guess they needed to do something to distract the shareholders. I’m just guessing.
What a stuff up! First of all, I couldn't believe they hired Switkowski, the wrong man for the job, and made the same mistake twice when they hired Trujillo. The company should sack its headhunter. After that, the entire board should resign and hand their jobs to a bunch of monkeys. What’s the use? They’ve all gone bananas anyway.
ps. Never trust blog entries to be factually accurate. :P