Don't believe the hype over the cost of Whitehaven hoax
GREEN prankster Jonathan Moylan has been widely blamed for temporarily wiping $314 million off the value of Whitehaven Coal last week, but shareholders lost a fraction of that, no more than $450,360.
Mr Moylan, 24, sparked widespread condemnation and calls for reforms to protect market integrity on Monday last week when he issued a hoax ANZ press release saying the bank had withdrawn a $1.2 billion loan to fund Whitehaven's controversial Maules Creek project in the Gunnedah Basin, citing "volatility in the global coal market, expected cost blowouts and ANZ's corporate responsibility policy".
His press release was reported by various media outlets and, within minutes, caused an 8.8 per cent collapse in the Whitehaven share price.
Mr Moylan later said the hoax release was the statement ANZ "should" have made, but politicians, including government whip Joel Fitzgibbon have called on the corporate regulator to make an example of the anti-coal activist.
Course of sales data obtained from Bloomberg by Fairfax Media, and verified with the Australian Stock Exchange, shows there were about 2,881,046 Whitehaven shares traded in 23 minutes after 12.18pm on January 7, when AAP first reported that ANZ's funding had been withdrawn.
Other media outlets soon followed, but by 12.39pm AAP had retracted the story and Whitehaven called a trading halt at 12.41pm.
By that time, Whitehaven shares had plummeted from $3.52 to $3.21.
Many investors sold on the way down to $3.21 and the stock was already recovering when trade was suspended, trading back up to $3.31. Trade reopened at $3.53 at 1.30pm.
The difference between $3.52 and the price of each share parcel traded while the market was misinformed marks the maximum potential loss attributable to the hoax.
Media reports have concentrated on the maximum $314 million wiped temporarily from the value of Whitehaven Coal at its low point - based on the difference in the market capitalisation of the company at $3.52 and $3.21.
Whitehaven shares closed 2¢ down at $3.50 on January 7, but were trading lower on Tuesday, at $3.37, down 6¢.
Federal opposition environment spokesman Greg Hunt said on Tuesday that most people would consider $450,000 "a substantial sum".
"If someone were to take and burn that amount of cash from retirees, families or businesses, that would rightly be denounced for its economic damage, personal damage and would inevitably attract the interest of the authorities," he said.
"It is the principle of the hoax which is the issue. Since when has it been right to take action which impacts on others in such a negative way? People have a right to oppose and protest, but they must respect the law."
Mr Moylan issued his fake press release from a laptop in the Leard State Forest, where he has spent more than 160 days camping in protest against three planned coal projects, including Maules Creek. He is being investigated by the Australian Securities and Investments Commission and Whitehaven is considering legal action against him.
Speaking in Sydney on Tuesday, after being called in for questioning by ASIC, Mr Moylan would not comment on the hoax but said "the costs to the community if the Maules Creek mine goes ahead in terms of dislocation of farmers, loss of water and health are far greater than any consequence that I could face".
Mr Moylan, whose phone and laptop have been imaged and returned by ASIC, said he would return to the forest to continue campaigning.
The ASX is reviewing its continuous disclosure rules that apply to all stock exchange-listed companies, including a proposal encouraging it to make greater use of trading halts to communicate to investors, as Whitehaven did last week.
An ASX spokesman said all trading in Whitehaven shares on the day of the hoax was within its rules and it had received no broker requests for cancellation of the trades.