Pump. Dump. Socialism.

2 minute read

The Dalrymple Bay IPO continues to be an open wound for anyone invested. With the stock down, it is understandable that certain stakeholders, such as controlling entity Brookfield and NBIM, would argue for a socialisation of coal clean-up costs.

In summary, Brookfield’s Dalrymple Bay Infrastructure Management (DBI) is seeking permission for the socialisation of remediation costs for the 8X coal-terminal expansion.

We believe it seems disingenuous of Brookfield’s vice-chair to release media statements illustrating how companies should pay more for pollution, while Brookfield-controlled DBI is pursuing socialisation of clean-up costs for a major coal infrastructure expansion. It is not entirely obvious that investors - the key non-Queensland stakeholders in DBI - are optimising on the welfare of current and future Queensland generations in general or taxpayers in particular.

The performance of DBI since the IPO in Dec 2020 has been -26% versus the relevant index and we sympathise with the retail investors’ view on the IPO - it did look a bit like a “pump and dump” operation. If retail investors believe that the socialisation assumption was not clear enough in the prospectus or that they otherwise did not get a full disclosure of investment risks, our advice is to contact the relevant parties of the IPO joint lead parties.

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