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 Financial Happenings Blog 
Saturday, August 12 2006

David Tweed does not seem to be a very nice person.  As the man behind Australian Share Purchasing Company he obtains the list of all shareholders in a company and then writes to them offering to buy their shares at below market value.  Invariably some less financially literate people fall for the offer and David Tweed ends up buying their shares at a discount to their true value.  A practice that seems to me to be nothing more than an intolerable disgusting rip-off of good people.

Earlier this week David Tweed launched a fairly pathetic defensive of his practices in a letter he wrote to the Australian Financial Review.  People will, however, defend his right to such activity on the basis that it is a 'free market'.

One of the theoretical inputs that a free market needs to work property is 'perfect information'.  The lack of information is what David Tweed is exploiting in his 'venture'.  (It is hardly a venture - something that destroys value for all customers is more akin to robbery than any proper business venture).  That is, people are not aware of how they can sell their shares to realise a higher price that David Tweed is offering, or else they would do that.  While ASIC has tried to limit David Tweed's attempts at robbery, including forcing David to put the current market price of the shares on any offer to purchase them, is seems people still get caught by his offers. 

Australian Share Purchasing Company seems to be so ironically named.  After all, ripping off good hark working people who just don't have all the information at hand is simply un-Australian!

Posted by: Scott Francis AT 06:07 pm   |  Permalink   |  Email
 
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