Can you please comment on Appen CEO’s recent actions and explain why their share price has dived?

From what I can make out on 6 May, Appen CEO decided suddenly to have some sort of a conference call. According to the analysts, his message was sending mixed signals. The share price dropped once again. Should he not have avoided the conference call, especially as there was a call which Appen had set up for 20 May 2021? The CEO had nothing to say towards the question raised by ASX as to why the share price had ‘dived’. Only thing which came out after the trading halt was that there was no reason for extraordinary share trading activity. Was it due to short selling?.

A: I agree with you. He certainly shouldn’t have addressed the conference.

The problem was not so much what he said, it was what he didn’t say. He didn’t reconfirm earnings guidance.

You can read this two ways:

  1. Appen is performing in line with its previous guidance – and hence, there was no need to disclose;
  2. He wasn’t ready to provide an update, but knows things aren’t getting any better, so he chose to say nothing.

Given recent downgrades and “credibility” issues, the market elected to go with the latter.


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