THE LAST GASP: The usual suspects

This week Facebook loses face, police fight over a messy Thomson job and Clive Palmer erects a billboard.

The Last Gasp is a wry take on the week’s biggest stories, every week. This week, Facebook gets unliked, police fight over a messy Thomson job and Clive eyes an even bigger seat.

Losing face

Facebook suffered the debut week from hell after its float failed to live up to expectations, with the social network flopping during its first session on the market, and opening late due to a problem that was later blamed on an error on the Nasdaq. Aggrieved investors could at least take some delight in the delicious irony of a market dedicated to technology-based stocks suffering from a glitch. The shares were up and down throughout the week, and now the company faces shareholder action over claims relating to lowered forecasts by underwriter Morgan Stanley. Elsewhere, the Coalition came under pressure earlier in the week after news emerged the party would look to hike taxes on multinationals such as Facebook and Google when (sorry, "if”) the party moves into government. Clearly the opposition is interested in getting its hands on some of that money everyone is making from the internet. Malcolm Turnbull was reportedly forced to make a hasty retreat after complaints the Libs were looking to place a further burden on the business community. Convinced that the opposition had taken the brunt of the outcry, Labor then stole the idea.

The thin red (band) line

Very early in the week, before Craig Thomson had a chance to lengthily protest his innocence before a sceptical parliament, it emerged that the embattled MP had asked police to review the surveillance tapes at the brothel where he allegedly spent thousands of dollars belonging to the Health Services Union. The news led to further ridicule of the member for Dobell, as well as a massive battle within the police force over that short straw. Thomson still denies the claims against him, and detailed an elaborate conspiracy against him in his speech to the House of Representatives. Despite his pleas to be left alone to fight the charges, the media mercilessly slammed Thomson, far worse than they had before his speech. In hindsight, using it to tear into the media’s conduct may have been a bad idea.

A big seat for Clive

Treasurer Wayne Swan had tough words for billionaire mining magnate Clive Palmer this week, warning that if he didn’t follow through with his promise to run for Swan’s federal seat of Lilley, he would face the most humiliating backdown of his career. Experts have reportedly questioned the claims, noting that nothing could possibly be as humiliating as the time Palmer announced a billion dollar contract with a Chinese company and then came out days later to say he got the name of the company wrong. And there was no contract. Big Clive duly hit back, reaffirming his intentions to run for parliament by placing a billboard spruiking his candidacy in the electorate. The move is rumoured to have led to suggestions Palmer may shelve his push for a stake in the media and resort solely to the use of billboards to express his conservative views.

Qantas doubles down

Qantas had a big week, managing to skilfully pace major releases on job cuts, route changes and a major restructure on separate days to ensure it remained front and centre in the news. The first announcement surrounded 500 job cuts and the closure of a maintenance plant in Victoria. Qantas chief Alan Joyce said the fired engineers were likely to find new jobs very shortly, as they were all highly skilled and everybody would want them. Except for Qantas, apparently. The carrier does deserve some credit, though, given it was largely open about the whole thing, and didn’t try to hide the job cuts behind anything. The group just called a press conference and explained the bad news to the media – at midday, when everyone was watching Craig Thomson’s speech.

Qantas doubles down

Qantas’ second major announcement was by far the biggest, with a major restructure cleaving the airline in two and management facing a number of serious changes. The shake-up includes the departure of JetStar boss Bruce Buchanan, who, according to a fairly unspecific press release, has joined skincare company Vanessa Megan in an unnamed role. He may be on the outer at Qantas, but at least he’ll look good doing it. A later announcement concerned a reduction in the number of flights the airline will run to and from the Northern Territory. Qantas said the move was due to continuing bad demand on the line, which was weighing on it margins. They were also reportedly unable to guarantee they had the engineers to maintain the planes.

Quick misses

– Customers are leaving Vodafone in Australia by the droves, with new stats suggesting the company has lost 120,000 clients in 2012 alone. The telco has blamed the exodus on the ‘perception’ the group has a poor network. Experts have reportedly suggested improving their poor network may be a good way to fix this perception.

– Western Australian premier Colin Barnett has denied that big businesses can buy influence by paying $25,000 a year to be a member of the West Australian Liberal Party's fundraising club. Confusingly, he later conceded members of the party's Leaders' Forum had some influence over mining environmental approvals. So to make it clear, the influence extends only while it remains appropriate. And then it stops.

– The federal opposition has blamed the closure of the Norsk Hydro smelter in New South Wales on the carbon tax. They reportedly later also blamed the mining tax, Craig Thomson and boat people.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles