Carnegie and raiding party face credibility test over next target
Nothing illegal about that, it's not insider trading. But it's reasonable to wonder if it is something rather like insider trading.
Having the Carnegie gang on the books and known to be agitating for change at Qantas certainly did the Roo's share price no harm. It has outperformed the market since the ginger group surfaced in late November.
You might think that exiting that stake - with about an $18 million profit - could cause the Qantas share price to fall. And it did. From the $1.515 close on Tuesday, Qantas shares dropped 3 per cent to a low of $1.465 on Wednesday morning before partially recovering. By the end of trade it was off 1.5¢ to $1.50 in a broadly higher market.
That's why you wouldn't inform the market of any intention to sell before the action. You're not required to. You'd be silly to.
As the vendor of such a high-profile "activist" stake, did the Carnegie crew have price-sensitive knowledge the rest of the market did not? It's a reasonable question.
If you can build a reputation as a raider, just your name appearing on the register is enough to lift share price and ensure profit. In the wild days of the '80s, Ron Brierley's Industrial Equity did it regularly. Often, a supposed raider's name could destabilise a company's register and trigger a bid from another party. Money for jam.
To maintain credibility, a raider needs to follow through occasionally. The 1.5 per cent Carnegie stake in Qantas was reportedly only held through certificates for difference - handy for a quick speculation but an expensive way of holding stock for more than the short term. Maybe they were never really serious.
The market might now wonder just how credible Carnegie and friends are the next time they pop up. Oh, that's right, they already have - as associates of Gina Rinehart on the Fairfax register.
Such games are further signs of a sharemarket turning bullish.
Frequently Asked Questions about this Article…
Carnegie and a group of high‑profile associates bought a small, publicised stake in Qantas, which helped lift the airline's share price as investors reacted to the 'ginger group' pressure for change. They later sold the stake for an estimated roughly $18 million profit, and the sale coincided with a short‑term fall in Qantas shares—showing how activist stakes can move prices.
According to the article, there was nothing illegal about the activity and it was not insider trading. However, the situation raises legitimate questions about whether the vendor of a high‑profile activist stake had price‑sensitive knowledge the broader market didn’t, which is a reasonable concern for investors.
A well‑known activist’s name appearing on a company register can lift the share price simply because the market expects pressure for change or a possible takeover. The article notes that just being known as a raider can destabilise a register and spark buying or competing bids, which benefits the activist.
The article reports the 1.5% Carnegie stake in Qantas was reportedly held through CFDs, which are useful for quick speculation because they avoid holding physical shares. But CFDs are described as an expensive way to hold stock long term, suggesting the position may have been intended as a short‑term play rather than a long‑term activist commitment.
Yes. After the reported sale, Qantas shares fell from a $1.515 close to a low of $1.465 the next morning before partially recovering. By the close the stock was about 1.5 cents lower at $1.50, indicating the exit had a noticeable short‑term impact on the share price.
A raider needs credibility so future appearances on registers actually move markets. If a group repeatedly shows up but rarely follows through, the market may stop reacting. The article suggests Carnegie and friends now face a credibility test the next time they surface, which can affect how much weight investors give to their involvement.
The article says episodes like these are further signs of a sharemarket turning bullish: activist manoeuvres, short‑term speculative plays and register activity often increase when markets are more optimistic and prices are rising.
Pay attention to whether the stake appears long‑term or is held via instruments like CFDs, whether the investor has a track record of following through, and any price‑sensitive disclosures. Don’t assume a register entry guarantees a takeover or lasting change—consider the motives and likely holding period before making investment decisions.
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