Apollo Global Capital [APL 0.10 7.14%] released a “Clarification of News Reports” disclosure yesterday, taking issue with an article that I wrote, seeking to “ensure that full, fair and accurate disclosure” of its information in order to protect the public and the company “from being misled by unverified statements made in articles such as the aforementioned”. The “aforementioned” article was written based on APL’s disclosure on August 9th, which covered the listing of 250 billion common shares that were issued to the shareholders of JDVC, which had used APL as a backdoor to listing on the PSE in 2017.
In my article (you can read it here), published the next day on August 10th, I wrote that “By listing the shares, the former JDVC owners will now be able to trade their APL shares on the open market just like everybody else. APL shareholders might look at this and wonder if some of the former JDVC shareholders might be looking to take some money off the table through the sale of shares, and that certainly could be possible. There are no lockup restrictions on the newly listed shares, and there’s nothing to stop any of the significant shareholders from trimming their positions ahead of the FOO.” This was the passage that APL quoted in its Clarification disclo. I based that passage on the disclosure APL released on August 9th, which I linked to in the article I wrote. In the section of the disclosure titled “Lock-up Details (if applicable)”, APL stated “-” to the duration of any lockup, “-” to the relevant rule relating to that lockup, “N/A” to the date of the escrow agreement governing the lockup, “-” to the names of the shareholders impacted by any mandatory lockup, and, finally, “-” to the names of the shareholders impacted by any voluntary lockup.
So, that day, I wrote my article based on the information provided by APL, and told investors that there didn’t appear to be any lockup restrictions on the 250 billion newly listed shares. The day after I wrote and published that information, APL amended its disclosure to include details of a voluntary lockup (you can read that, here); the amendment was expressly to “inform the public” that APL informed the PSE on August 11th that the JDVC shareholders had agreed to place their shares under a voluntary lockup. The FOO prospectus that APL says contained this information first appeared on the PSE’s disclosure server on August 12th, which links to a document called “Final Prospectus as of August 13, 2021”.
MB BOTTOM-LINE
Thanks to /u/HufferHS for letting me know about APL’s clarification disclo. This is a case where APL and I are both kind of right. On the one hand, at the time that I wrote the article that APL takes issue with, APL had not disclosed (to the best of my knowledge, and the best of my reading of APL’s guidance) to the public that any of the newly listed shares were governed by a lockup agreement. The day I published the article, I was not being “misleading”, nor had I based what I wrote on “unverified statements” (it was based on APL’s own disclosure).
APL amended its disclosure the day after my article was published and submitted its FOO prospectus two days after my article was published; it’s not crazy to think that there is a non-zero chance that APL was prompted to amend its disclosure after having first read my article. I’m not claiming that that is what happened, but it’s certainly possible. Whether APL realized on its own that it had omitted that information from its initial disclosure, or it was prompted by the exchange, its advisors, or my article is kind of beside the point. On the other hand, I must note, it is also true that APL did eventually disclose that the shares were subject to a voluntary lockup and that the original content of my article is now “out of date” and not perfectly reflective of what we have since come to learn thanks to APL’s subsequent disclosures.
But that’s kind of how all of this works, isn’t it? We, the investors, take what the companies tell us, and we try to make as much sense of it as we can in real-time as the information trickles down from the primary sources (like APL). Sometimes, that information from the primary source is incomplete or inaccurate, but that’s not something that we investors could possibly know at the time. Of course, if I were able to look into the future to consider the contents of an amendment made tomorrow and disclosure made the day after that, well, let’s just say that I probably wouldn’t be spending my time with that ability reading APL disclosures. But I can’t, so I do. So it goes.
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