In its press release announcing the new value of its share as of May 31, 2022, Fondaction de la CSN completely ignored the sharp drop of 8.7% in the value of its share during the 2e semester from 1is December to May 31.
In this press release published on the eve of the National Day, the management of Fondaction contented itself with saying that the value of its share is now set at $15.02, while adding: “This is a slight decline 2.8% in the fiscal year beginning on 1is June 2021.”
Let’s set the clocks back.
A year ago, on May 31, 2021, Fondaction shares were worth $15.45. But this price had been revised to $16.46 on November 30, following a positive return in the first half of the new fiscal year 2021-22.
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As a matter of transparency, it was therefore necessary, in my opinion, to notify the shareholders of Fondaction that the new price ($15.02) was down significantly (-8.7%) compared to the previous price ($16.46) which was in force.
To show you how important this information on the 8.7% drop in the share price was to disclose in Fondaction’s press release, you should know that this information is part of the “Highlights” reported in the “Report annual management report for the fiscal year ended May 31, 2022”.
THE OMISSION IS TIMELY
Not disclosing this 8.7% decline in the share price over the past six months in the June 23 press release is a timely omission this year!
Focusing attention on the “slight decline” of 2.8% from the price of a year ago would hurt shareholders less than telling them that the price of their shares had actually fallen by 8.7% compared to the price in effect for the last six months.
With labour-sponsored funds, since the share price is determined twice per fiscal year, at the end of the first semester on November 30 and at the end of the second semester on May 31, it therefore seems essential to me to disclose six-monthly stock performance in earnings releases.
QUESTION TO FONDACTION
“Why did Fondaction not disclose in its June 23 press release that the net shareholder return had fallen by 8.7% during the second half, the share thus falling from $16.46 to only $15.02? Isn’t this crucial information that should be disclosed to shareholders in the press release? I asked.
Response from Fondaction’s spokesperson, Julie Cailliau: “In June, it is the occasion for a review of the year, so we presented the evolution of the financial and extra-financial performance of the last 12 months.”