Final twist of IDB's wild roller coaster ride
Publisher Yoel Esteron addressees Calcalist's Capital Markets 2013 conference, explains why public is disenchanted with IDB's current vicissitudes, what dramatic loss lies behind this indifference
We are currently witnessing a fateful moment (or rather another fateful moment) in the convoluted history of the behemoth corporation which so often occupies the headlines.
The most surprising aspect of the final twist (at least for now) in IDB's wild roller coaster ride is that just a moment before the plot climaxes and the villain or the good guy (you decide which is which) gets to ride off into the sunset and live happily ever after with the princess, the public lost interest.
The reason behind the rating slump is rather mundane – the public is simply bored with the never-ending soap-opera called IDB. We're sick to our stomachs with headlines announcing yet another scandal, dramatic statement, fatalistic decision or the not-so-witty "rumors of Dankner's death were premature".
And truth be said, any which way the plot turns – It cannot come to a happy ending. Nothing is happy about IDF – no happy Hanukkah or Marry Christmas for its shareholders. It's not even interesting enough for ill-wishers to gloat about. This is not the controlling consortium we had in mind. We didn't expect the likes of Alexander Gronovsky and his more or less known cohorts nor did we dream of Eduardo Elsztain and his mysterious – or imaginary – friends to take the reins at IDB. And what about Moti Ben-Moshe? He seemed to have come out of left field.
When York Capital Management's Jeremy Blank made his financial round at IDB and was thought to have designs to take over the company, I personally thought we deserved better. Vultures like Blank seemed indifferent to the interests of the Israeli public. But on second thought what do we know about Elsztain or Gronovsky, or about their sense of commitment and integrity?
Furthermore, one cannot help but wonder why not one local or foreign investor with a bit more gravity expressed interest – to put it mildly – in the mega-corporation that still has a few attractive assets to show for?
But IDB is just one piece in a puzzle comprising a slew of companies that are in the midst of the maelstrom. The problem is that the public has long lost its trust in the institutional and private corporations to which it has lent its money. It had lost its faith in the decision makers down the line and their ability to use common sense. It no longer believes in the market players, some of which have a track record of pushing heavy weight corporations to bankruptcy.
In a sense, the public has also lost its faith in the regulators and one cannot blame it for failing to distinguish between one corporation or another or for its propensity for dangerous generalizations when it comes to the capital market.
This is because the rules on the capital-market court are that the "players" namely the lenders, traders and brokers, freely toss around the "ball" - our hard earned money we trustingly place in saving accounts, pension and trust funds and other saving instruments generally held by institutions that lend it out to such dubious corporations.
Public trust is staple commodity for the entire capital system. Without it the capital market is in danger of crashing. This is why lenders and borrowers and those in between must to regain the public's trust, which is currently eroding at a fast pace. It behooves them to prove they deserve it.
Yoel Esteron is the founder and publisher of business daily Calcalist
