To list on ASX or not?

March 4th, 2013 at 6:59 am by David Farrar

Kate Chapman reports:

An announcement will be made this afternoon after the Cabinet makes its final decisions.

One of those will be whether to dual-list stock on the New Zealand and Australian stock exchanges, as indicated by an Australian media report on Friday.

To do so would fly in the face of the Government’s promise that Kiwi mum-and-dad investors would be at the front of the queue.

It won’t, but it may be perceived as doing so. In reality dual listing is unlikely to greatly change the proportion purchased by New Zealanders. The impact is more likely to be on price.

Business commentator Rod Oram said the Government faced a dilemma.

“On the one hand it wants to get the best price it can for the shares, but in terms of stimulating demand, it’s going to run into political flak.”

Australians can buy shares on the NZX, but listing In Australia would make it easier and increase demand.

Rod Oram is correct. Dual listing will increase the price, but also that Australians can buy shares directly on the NZX also.

I own a number of shares that are listed on the ASX only – and I’m not Australian.

It would also create demand from institutional investors that did not trade in New Zealand.

That would drive up the price and ensure the Government got the maximum benefit from the sale, Mr Oram said.

“The counter of that is, in doing that, they would be guaranteed to increase the foreign proportion of shares held in the company.”

There would be some impact, but the Government’s allocation model will be the prime factor. They are very focused on over 80% being NZ owned.

Dual-listing would also seem to fly in the face of the Government’s argument that the asset sales would boost domestic capital markets.

“Listing in Australia does somewhat undercut that,” Mr Oram said.

A fair point.

Labour MP Clayton Cosgrove said the four state-owned energy companies that the Government planned to sell down would inevitably end up in foreign ownership.

A stupid point. This is literally impossible under the law passed by Parliament.

Oram not drinking the kool aid

January 27th, 2013 at 2:00 pm by David Farrar

Nice to see Rod Oram is avoiding the kool aid that so many others are lapping up. Oram writes in the SST:

Dangerously for us, however, Kim Dotcom has plunged into this gap. The man and his business models are the absolute antithesis of what the internet and this country need.

He dangles a glittering prospect others have offered before: he says we could generate jobs, wealth and taxes if we turned ourselves into one of the world’s great data storage sites. After all, we have abundant, cheap and renewable electricity to power the servers. All we’d need is bigger cables to connect us with the world and a change of laws to make us the Switzerland of data secrecy.

He claims his new services, if they were based here, would within three years generate more traffic than the rest of NZ online activity combined. But everything is wrong about this proposition, from the economics to the practicality and morality.

A harsh statement. Does Oram back it up?

Mega has one main difference: all data on it will be encrypted automatically as users load their files. Mega’s owner and staff, not to mention governments and copyright holders, won’t be able to check what might be pirated. …

He is also causing trouble for himself by getting offside with some in the international tech community. Within days of Mega’s launch, encryption experts exposed numerous weaknesses in its systems.

Were these given as much publicity as Wheedle’s?

In coming months he will launch his next service, Megabox, for music. Users will either pay for downloads or agree to download Mega software. This will displace ads on other websites with ads on which Mega will collect revenues. Either way, Dotcom says, artists will get money for their music. Google will certainly test the practicality and ethicality of this, since Dotcom is targeting 10 per cent of its ad revenues. He will find it, and other ad services, formidable enemies.

Russell Brown has blogged on this here. He basically labels it as stealing from publishers such as himself.

Oram continues:

Even if these businesses were successful, Dotcom’s claims that he can create significant economic value for New Zealand are pure fantasy. Data storage of the type Dotcom peddles is a commodity business with wafer-thin margins and minimal value generation, in either jobs or other activity.

So Dotcom would never invest in server farms here. Even if we offered him fabulous connectivity at dirt-cheap prices he would do as he does now – scour the world for the cheapest storage he can rent from others. We would always be underbid.

Worse, we have become deeply entangled in Dotcom’s legal problems. Our Government’s stupid decision to give him residence here, and its incompetent surveillance and arrest of him, is dragging it and the country ever deeper into Dotcom’s murky world.

We will find it very hard to get rid of Dotcom. If he wins his case against extradition to the US he will be too scared to travel abroad for fear the US will have another go at him. If he loses his case, appeals and delays will drag on for what will seem like eternity.

Meanwhile, he clearly loves life here as he plays the role of internet hero to local and global audiences. New Zealand’s reputation can weather this. Every country has its share of such comic fantasists.

Anyone with a bit of sense knows true internet pioneers brilliantly devise and deliver valuable services for others, as have the founders of companies such as Apple, Google and Facebook; or fight heroically for principles, as Aaron Swartz did – as his recent obituary in The Economist testifies.

While many in our internet community can spot the difference, some of them are far too enamoured of Dotcom for their own good or the country’s. They acknowledge his fatal flaws but think he can help fast-forward New Zealand’s internet development.

We have a lot of things to offer the internet, including integrity. But hosting Dotcom is not one.

Nice to see some critical analysis.

Guerin on Oram

August 23rd, 2011 at 2:00 pm by David Farrar

Tertiary education specialist Dave Guerin corrects some errors by Rod Oram:

Rod Oram wrote an opinion piece on industry training yesterday that sets out some strong views on industry training but also has some enormous errors. I often disagree with Rod Oram’s prescriptions, mainly on pathways rather than outcomes, but he usually gets the relevant facts right.

First up, he seems to have taken hook, line and sinker the Labour myth that National destroyed industry training in the 1990s and Labour fixed it – check out the following quote.

Oram said:

Reviving industry training was one of the key planks of Helen Clark’s 1999 election campaign. The Modern Apprenticeship Act of 2002 was one of her government’s first major pieces of legislation. It created Industry Training Organisations, each tasked with developing government-funded programmes for its specific sector.”

Guerin points out:

First, ITOs were established by the Industry Training Act 1992, by National, 7 years before Helen Clark gained power.

Oram said:

But this was exactly the deeply damaging mistake the Bolger government made with the Industry Training Act of 1992. It radically reformed skills training, leaving only skeletal government support.

Guerin responds:

Second, there was no “skeletal” support for ITOs. They got substantial start-up grants to explore feasibility (which is partly why we ended up with so many ITOs) and then had funding transferred from polytechnics to purchase training. Everyone wants more money, but ITOs were not starved.

Oram said:

As a result, the number of people in formal workplace training plunged and skills shortages became chronic.

Guerin responds:

Third, workplace training did not plunge due to the Industry Training Act 1992. The table below shows that industry training numbers started falling in the March 1988 year, when Labour was in power. The drop is unsurprising given the huge structural changes being made in the economy, education and in labour markets over that period – an increase would have been surprising. Even though the decline started under Labour, it reached its highest percentage decline in the June 1992 year (the Industry Training Act became law on 22 June 1992, so can’t bear too much blame). The decline continued until the June 1993 year, after which numbers rose the next year.

In 1988 there were 28,240 trainees. This fell to 14,904 by June 1994. However by June 1999 it was 49,577 and June 2000 hit 63,102.

Guerin also points out:

Rod Oram also wrote that ITOs “offer a confusing array of 4600 qualifications at levels one to six”, whereas readers will know that the majority of qualifications are owned by providers, not ITOs.

It’s great to have had those myths dispelled.

Kiwi Foo Camp

March 4th, 2009 at 12:00 pm by David Farrar

A belated post about the great experience that was 2009 Kiwi Foo Camp.

The first question people have, is what does Foo stand for.  Foo stands for Friends of O’Reilly – that being Tim O’Reilly of O’Reilly Media.

Kiwi Foo Camp is a local version organised by Nat Torkington (and his wife) who works for O’Reilly. It is for “technology industry people and policy makers”.

This was the first one I had been invited to – they are invite only, and I was thrilled to be invited and pleasantly surprised by how many people I knew there – and even more pleased to meet dozens of new people.

There are a number of great things about Foo Camp. The first is that there are no stupid people there. Yes, I know that sounds a bit wanky, but what I mean is everyone there was interesting, and interested. It is a retreat for those who are intellectually curious. You get to have a range of discussions that are stimulating, and fascinating. You also learn how much you don’t know.

The second great things is there is no agenda. It is an un-conference. What do I mean by that? Well when we get there on Friday, we work out the agenda by ourselves. And no not by sitting in a big circle – more like a human Wiki.

There are six classrooms available and around twelve slots on Saturday and Sunday morning. So they have up on the wall the 72 session slots. And any attendee who wants to speak on a subject just writes on a large sticky what their topic is in a sentence, and sticks it in a slot. And eventually you have all 72 slots filled.

But even better, you can change things around. For example there was a session on fibre to the home and on copyright laws at the same time in different rooms. So I just unilaterally moved one session to another time. And other people could and did move sessions about so they could attend the ones they want. And whatever we end up with by end of Friday night is the agenda, so to speak.

There were sessions on everything from highly geekly programming stuff, to digital photography to surviving the recession to ideas for Bill English to grow the economy etc etc.

On Saturday evening we had a great debate with Russell Brown, Rod Oram, Bernard Hickey and others debating “Is New Zealand fucked?”. The debate itself was funny enough, but at the end every audience member could also get up and speak for 30 seconds on their view – but they had to start with “Fucked” or “Not Fucked”. Apart from the hilarity of hearing the F word around 300 times, there was also some great insights into NZ.

I observed a great game of Werewolf, with around 30 participants on Saturday Night. Next time I’ll join in, now I know the rules.

Kiwi Foo Camp wasn’t just a talkfest. It is also where key people came together to further the anti S92A “guilt by accusation” campaign. We had a great session brainstorming ideas (such as the Blackout), and also had a session on the long term issues around copyright law internationally and domestically. Kiwi Foo Camp made a real difference to stopping S92A having come into effect last month.

The Kiwi Foo mailing list sort of got hijacked after the event to co-ordinate the campaign, and at its peak there were 200+ messages a day – almost impossible to keep up – but worth it.

So all in all, a great experience was Kiwi Foo Camp. And big kudos to not just the organisers such as Nate, Jenine and Russell – but also the wonderful catering squad who fed us so well.

Other blogs coming out of Foo Camp are this post by Lawrence Millar (NZ Govt CIO), The Strategist and Artifical Code.

Oram on Fast Forward

March 16th, 2008 at 1:30 pm by David Farrar

Rod Oram writes with scepticism on Fast Forward:

Instead, the government shelved the report, and has now unveiled Fast Forward, the latest in its many, shifting, inadequately executed attempts at economic transformation. It is a big slug of money with no under-pinning strategic plan.

Given the primary sector’s lack of strategic vision, there is every danger that users of the Fast Forward fund will keep dragging it back to incremental projects that play to the sector’s historic focus on commodities.

And there are plenty of other risks too, such as a dominance of the government funding by dairying in general and Fonterra specifically, of tensions between competing companies and of political uncertainty.

I’ve also heard from industry sources, that dairy will be a dominant funder, and that there is no way in hell they will be paying for research in non dairy areas, as the Government has been suggesting.