19 October 2019
Is it David Webb? No, it's 'David Wet', according to the latest video commercial from Yes Lady Finance, a subsidiary of Hong Kong-listed Milan Station. Photo: Youtube/Yes Lady Finance
Is it David Webb? No, it's 'David Wet', according to the latest video commercial from Yes Lady Finance, a subsidiary of Hong Kong-listed Milan Station. Photo: Youtube/Yes Lady Finance

Webb in spoof commercial, Faber out of TV shows

Two famous stock market commentators made unwanted headlines this week.

We are talking about Hong Kong-based shareholder activist David Webb and Swiss investor and market analyst Marc “Dr Doom” Faber.

First, to Webb, who is a well-known figure in investment circles here after he fought several battles over the years seeking better corporate governance at listed firms.  

Well, the activist has now become the subject of discussion for a totally different reason, and one that is possibly causing him dismay.

Earlier this week, Yes Lady Finance, a subsidiary of locally-listed firm Milan Station, came up with a commercial video to promote its stock lending business.

What was interesting is that the ad deploys a fictional character called “David Wet” to make its point, an apparent take-off on David Webb.

“David Wet” was made to look like the real-life corporate activist, including the eyewear. 

For observers who follow the financial markets closely, it seemed Milan Station was trying to have some fun with Webb, who has not exactly been on friendly terms with the firm’s management.

It was a spoof, and not particularly funny.

Also somewhat ironic, as Webb, a successful small-cap analyst, would no doubt have been unlikely to preach the beauty of margin financing in public.

Founded in 2009, Yes Lady Finance provides mortgage lending to handbag buyers, a side business of Milan Station, famous for profiting from consumers trading expensive handbags in the second market.

Yes Lady, 50 percent owned by Milan Station and 48.5 percent by the chairman’s wife, is known to harbor plans for a separate listing on its own.

Webb has been a critic of Milan Station, which he put as one of the 50 stocks not to own. The stock lost about 40 percent since Webb issued a negative report in May.

In March, the activist criticized Milan Station for buying a money-lending business that may be involved in questionable loans to consumers.

Webb commented: “It’s never good news when a listed company does that, in our view.”

Following the criticism, Webb is no doubt Milan Station’s least favorite analyst, and the company may have wanted to get back at him. 

The video commercial should, hence, be seen against this backdrop. We can only guess as to how Webb must be feeling — whether he is outraged, or if he is just amused. 

Now, coming to Faber, the market guru who pens the “Gloom, Doom, and Boom” report, he too has found himself at the center of chatter in investment circles this week, and not for good reasons.

The financial expert, in his influential monthly newsletter, went off course as he indulged in what observers felt was a racist diatribe.

Faber, known as Dr Doom for his famously bearish market predictions, suggested in his October report that the US is great primarily because it is ruled by white people.

“Thank God white people populated America, and not the blacks. Otherwise, the US would look like Zimbabwe, which it might look like one day anyway,” Faber wrote in the newsletter, media outlets reported.

“America enjoyed 200 years in the economic and political sun under a white majority. I am not a racist, but the reality — no matter how politically incorrect — needs to be spelled out as well.”

The comments drew fierce criticism, with many people accusing Faber of racism and insensitivity.

Amid the backlash, prominent financial TV stations announced that they were dropping Faber from their guest list.

Faber had earlier been a regular invitee on stations such as CNBC and Fox Business.  

And it is not only the TV stations, Faber will also be missing from the boards of some companies.

According to media reports, Faber has left the boards of mining firms Novagold Resources and Ivanhoe Mines and money manager Sprott in the wake of the controversy.

Sprott CEO Peter Grosskopf said Faber’s comments are deeply disappointing and are completely contradictory with the views of the company and its employees.

Given that TV appearances and board meetings are out for now, we assume Faber will have enough time for introspection.

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EJ Insight writer