Episode 154: DroneShield Drill Down, Corporate Travel Management Implodes, BOM Laughing Stock, Compaq, Mike's Jet and the Richest New Zealanders
The guys go deep into the debacle at DroneShield, Corporate Travel Management's refund disaster, BOM's dud app, Compaq's fascinating backstory, and who is the richest person in NZ.
The Contrarians catchup
The guys discuss Atlassian blowing out their emissions targets and wonder whether the CEO has access to the company’s private jet, or vice versa. Adir said “if the guy wants to buy a jet, let him buy a jet.”
Adam wrote about DroneShield for the AFR - you can read it here: The DroneShield share sales should not have been a surprise (“The $60 million sell-off by the firm’s top brass triggered a 70 per cent crash, but the fall was foreshadowed at businesses linked to chairman Peter James.”)
The guys discuss the definition of “cash receipts” as part of the infamous DroneShield selldown and how much time the leaders should’ve given shareholders to inform them of pending changes.
Adir poses the question: who is the richest person in New Zealand? You probably wouldn’t believe the source of their wealth is connected to Mini Brands, those tiny consumer product toys you see in department stores.
Adir’s latest book recommendation: ‘Open: How Compaq Ended IBM’s PC Domination and Helped Invent Modern Computing’. “This book has very little entertainment value but as a business strategy book, it’s fascinating.” Adir takes us on a tech history journey that is a must-listen.
Adam believes the best Apple innovation isn’t the iPhone or any of its other hardware or software products, but rather the Apple store, which is “probably the greatest commercial unlock in the history of business.”
DroneShield drill down
DroneShield’s share price crashed about 48% in November as confidence evaporated after large insider share sales, a mis-stated and later withdrawn US contract announcement, and the abrupt resignation of its US CEO. Heavy short-selling and extreme share-price volatility then compounded the rout, prompting a sharp governance-driven rerating by wary investors.
Adir: “I think they should’ve held onto their shares, I don’t think they should’ve dumped them, and I think their subsequent excuses are hopeless. But of all the things that are wrong here, they didn’t give shareholders the chance to react, they didn’t disclose in a big enough window.”
Adam: “You know how they say plane crashes are rarely from one thing? Point one was why is the Chairman getting so many options. Point two is they didn’t disclose to the market appropriately. Point three is this stupid cash receipts metric. Point four is that they sold straight away. Everything combined, this just stinks.”
Adam: “I think the only thing that can save these guys is a high share price and that’s not gonna happen.”
The $96.5M website
Australia’s Bureau of Meteorology triggered public outrage after a long-awaited website redesign removed key features, confused users and cost $96.5M - far above the stated $4.1M. Farmers, emergency workers and everyday Australians slammed its poor usability, forcing apologies, government intervention and partial reinstatement of the old site within days.
Adir: “If you said to me that I have to update the BOM website but there’s a pre-requisite, I have to spend $96.5M to do it, I actually wouldn’t know how to spend that much.”
Adam: “It’s unconscionable how stupid these people are. The government should be running like 5% of what they’re actually running - almost everything they do, they stuff up.”
Corporate Travel Management implodes
Corporate Travel Management (who “drive savings, efficiency and safety to companies”) uncovered more than $158M in overcharging across FY23–FY25, forcing major revenue reversals, potential refunds, and added bad-debt provisions. Shares are suspended until 2026, the UK CEO is stood down, and KPMG is investigating. The company has apologised as the accounting scandal continues to widen.
Adir: “There are two sides to this incompetence. There’s the company side for not reimbursing. But also, what is the cost control going on in these organisations?”
Adam: “This is like a lawyer stealing from your trust fund and gambling it away. This hasn’t been properly reported yet, I only know about it because it happens to be another travel business. This is a pretty diabolical situation here. I can’t remember another time where a company owes more than its cash balance after ripping off its customers. It’s basically unprecedented in Australian corporate history.”
Five other stories worth following:
Interlune plans to mine Helium-3 from the moon at $20M per kilogram. A prototype excavator is ready, aiming for 2029 delivery, with Bluefors already ordering $300M+ worth.
CompanyCam, founded in 2015 to manage roofing projects, hit a $2B valuation through Nebraska’s biggest equity round, highlighting strong demand for construction tech tools.
The World Cup draw is set for Friday with match schedules on Saturday, Messi playing in the MLS final, and top college football teams battling for playoff spots this weekend.
After record Black Friday sales, Cyber Monday is poised to set new records, offering insights into US consumer health, followed by a week of major retailer earnings reports and sentiment data.
A New York judge will hear arguments on evidence in Luigi Mangione’s trial for the fatal shooting of UnitedHealthcare’s CEO, with the defense challenging the admissibility of his notebook and police statements.