Alliance Global walks back 'P100B/year' capex statements
![Alliance Global walks back 'P100B/year' capex statements](https://media.philstar.com/photos/2021/07/01/stock-commentary-thumbv3jpg_2021-07-01_08-58-57.jpg)
Alliance Global [AGI 8.90, down 0.8%; 37% avgVol] [link] issued a clarification where it gently walked back some statements made by its CEO, Kevin Tan, about the company’s plan to spend “P100 billion annually over the next four years” as reported by Bilyonaryo (“Alliance Global locked and loaded”). AGI clarified that its capex spending plans for FY24 were P75 billion, which it announced on July 18. AGI further clarified that it is possible for AGI’s group capex to hit P100 billion “in any given year”, but that is “only an initial forecast” and that “nothing is defined or committed yet”. AGI referred to the P100 billion capex spend statement as a “forward-looking in nature.”
MB bottom-line: We see disclaimers about “forward-looking statements” all the time, and their purpose is to dress whatever is said in speculative clothing to reduce the liability of the speaker in the case he or she is wrong. Even the clarification statement offered by AGI carried a big disclaimer about forward-looking statements at the bottom: “These forward-looking statements can generally be identified by use of statements that include words or phrases such as Alliance Global Group, Inc. (AGI) or its management “believes”, “expects”, “anticipates”, “intends”, “plans”, “projects”, “foresees”, and other words or phrases of similar import.” Interestingly, the statements made by Kevin Tan in the linked article don’t contain any of those typical weasel words that the disclaimer says we could use to identify forward-looking statements in the wild: speaking about AGI’s push to increase spending on townships and tourism, Mr. Tan said, “So for the next few years, our investments here will continue to increase.” I’m not trying to make a mountain out of a molehill here. Executives misspeak all the time, and that’s part of the reason why so few feel comfortable speaking in public and especially on the record. The key takeaway here is that we should consider statements about future capex spending to be nothing more than the empty “investment pledge” equivalent for the domestic corporate world.
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