Lessons in the art of deflection

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

Every once in a while, something out of the ordinary happens – economic forecasts that hit the mark (do they ever?); countries vote for the UK’s Eurovision Song Contest entry (not this year!); relatively painless US debt ceiling negotiations (here’s hoping that’s not jinxed them).  To the list, can be added another rare sighting – a Food on the Move without any share price non-movers to report.  How rare is that?  No non-movers since records began.  That’s how rare.  In all, the week ended 28 May 2023, saw 15 share price risers and 33 fallers in FFF’s listed FoodTech space.  Not a non-mover in sight.

Lesson#1 in the art of deflection – draw attention away from yet another poor week in FFF’s listed FoodTech space by focusing on a harmless factoid such as the number of share price non-movers…

Turning to individual stocks, top performer of the week was Calyxt. Shares in the plant-based synthetic bio specialist were up a third after shareholders voted in favour of the combination with gene editor Cibus. Wednesday 31 May 2023 is the expected date for the completion of the merger which is set to “create a new industry-leading company that combines the two pioneers in agriculture-based gene editing and establishes one of the world's most sophisticated facilities for trait development and next-generation plant breeding.”

Calyxt went on to announce that “Following the closing of the merger, the combined company is expected to change its name from Calyxt, Inc. to Cibus, Inc., trade on The Nasdaq Capital Market under the ticker symbol ‘CBUS,’ and be led by Cibus' existing management team.”  A reminder that this is more a takeover by Cibus than a merger.  For as Calyxt’s January 2023 press release announcing the ‘merger’ stated: “Under the terms of the merger agreement, Calyxt will issue shares of its common stock to Cibus shareholders in an exchange ratio such that upon completion of the merger, Calyxt shareholders will own approximately 5% of the combined company…” Not a merger of equals then.

Lesson#2 in the art of deflection – avoid the use of emotive words such as ‘takeover’ in favour of more equitable terms such as ‘merger’ to help seal the deal…

Next lesson. GRAB announced that “Tan Hooi Ling has informed its board of directors of her intention to step down from her operating roles at Grab, including her directorship, by the end of 2023.”  Shares ended the week up 10% at US$3.04 – market happy to see the back of the co-founder? Or perhaps the market was reassured by the news that the online delivery co.’s former COO “…will be transitioning into an advisory role with Grab moving forward.” The mutual admiration expressed by both sides could have had something to do with the positive share price reaction too...

First up, this from Anthony Tan, GRAB CEO and fellow co-founder: “I have enormous respect and love for Ling, as both a business partner and a good friend…I am so blessed to have found a true partner who cares deeply about the impact we create for Grabbers, our partners and our region. Ling has invested herself fully into setting up the right leadership bench and cultural foundations for Grab to thrive for the long-term, and while I will miss working with her dearly, I thank her for the many years of trust and partnership, and wholeheartedly support her decision to pursue her personal passions.”

Feelings are mutual. The departing co-founder said: “Grab has been one of the most fulfilling experiences of my life. The impact we create is a reflection of who we are as a team, and I am humbled to have been able to walk alongside Anthony and the many amazing Grabbers who share the same values and work ethic to build something that improves lives in Southeast Asia.”

Lesson#3 in the art of deflection – to deflect concerns shareholders may have regarding a change in leadership go the extra mile to highlight how the leaver is staying on in an advisory capacity and how both sides have nothing but respect for each other.

Time for one more lesson…Veganz shares added 2.5% over the week.  Not bad going considering the vegan foodie had to issue a correction to its recently announced Q1 results.  Apart from the announcement’s title, ‘VEGANZ GROUP AG: CORRECTION TO THE PUBLICATION OF 11 MAY 2023’, not much of a steer given on what actually required correcting.  See for yourself – compare the correction above with the original announcement, ‘VEGANZ GROUP AG: VEGANZ WITH EARNINGS IMPROVEMENT IN THE FIRST QUARTER OF 2023’.

Give up?  As far as Food on the Move can tell, the misinformation was centred around Veganz’s Q1 sales.  The original press release stated: “Veganz Group AG's sales in the first quarter of 2023 was EUR 5.2 million (prior year: EUR 6.3 million).”  Meanwhile, the correction highlighted a lower sales number: “Veganz Group AG's sales in the first quarter of 2023 was EUR 5.1 million (prior year: EUR 6.3 million).”

Lesson#4 in the art of deflection – deflect attention away from mistakes (and lower sales numbers) by providing investors with a tricky ‘spot the difference’ challenge…