ASX Company Spin: Here are 7 occasions when management tries to sell bad news as good news

In all our years, we have seen our fair share of ASX Company Spin. It is repeated because often investors fall for it. Even if not all do, it is sufficient that some investors fall for it to achieve what has to be achieved.

For instance, that enough believe a capital raising at a >25% discount makes the company ‘well positioned’ to raise the money. Or that the CEO’s desire to ‘diversify his/her portfolio’ in no way reflects their confidence in the company, so won’t follow the leader.

This article has 7 occasions when ASX companies try to spin something good out of bad news.

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Here are 7 examples of ASX company spin

1. Management departures

One of the most common is the CEO or CFO departing “to pursue other opportunities” or “by mutual agreement.” When a senior executive leaves shortly after a downgrade or strategic misstep, it’s often less about career exploration and more about board pressure.

For example, leadership turnover at Crown Resorts during regulatory investigations was frequently framed in orderly language, even as the business was facing existential licensing risks. Similarly, at Star Entertainment Group (ASX:SGR), executive departures were couched in standard phrasing despite intense regulatory scrutiny and financial strain. The wording stays bland; the timing tells the real story.

2. Insiders selling shares

Another classic is insider share sales described as “personal financial management” or “portfolio diversification.” Sometimes that’s genuinely true. But when a founder or CEO sells a large parcel near cyclical highs, investors reasonably question signalling.

Executives at high-flying growth names like WiseTech (ASX:WTC) and Cettire (ASX:CTT) have periodically sold down stock. Sometimes there are explanations about diversification or funding philanthropic ventures. The optics depend heavily on timing and whether performance continues to justify confidence.

3. ‘Year of Transition’, ‘Year of Reset’…or something along those lines when bad earnings are reported

Companies miss guidance, then describe the next 12–24 months as a deliberate period of reinvestment to unlock long-term growth. Sometimes that’s credible; other times it’s a way to rebase expectations after overpromising. A2 Milk (ASX:A2M) used forward-looking investment language following its sharp earnings reversal tied to China channel disruption, even as the market repriced the stock dramatically lower.

4. Divestments

Asset sales are frequently described as “non-core divestments” or “portfolio optimisation.” That can mask balance sheet pressure. When AMP (ASX:AMP) sold major businesses after years of outflows and reputational damage, announcements emphasised strategic focus and simplification. In substance, they were also about shoring up capital and repairing a weakened franchise.

5. Strategic reviews

When announced, they are presented as proactive and value-enhancing, but often signals that performance has deteriorated enough to require external validation or a potential sale. When Myer initiated reviews amid prolonged retail pressure, the framing was around unlocking shareholder value. The subtext was that organic turnaround efforts had struggled.

6. Banks amending facilities

Covenant waivers can get polished language. Even covenant waivers get polished language. Banks providing “amended facilities to support growth initiatives” can actually mean lenders have tightened terms after earnings disappointment. The press release rarely highlights that equity holders just moved further down the priority stack. They may seam harmless cases of ‘kicking the can down the road’ for a year or two, but why do it if you don’t need to?

Then again, in such circumstances where companies announce this has happened, it is the banks choosing to give the company another chance when they do not have to. Just ask Liontown (ASX:LTR) which in early 2024 lost a funding facility due to collapsed lithium prices.

7. Capital raisings done at a discount

We’ve saved the most common until last. The language management uses is always upbeat — “strategically positioned,” “well funded,” “transformational” — even when the underlying reality is dilution, underperformance, or survival funding.

Appen announced a large discounted raise in 2023 described as accelerating its AI strategy and strengthening the balance sheet. But it came after client concentration issues, falling revenues, and strategic drift. The raise was less about offensive expansion and more about repairing a weakened financial position.

Plenty of travel stocks during the COVID shutdown raised capital. None could hide the reality of the macro shocks, but all these companies presented them as an opportunity to “emerge stronger” and pursue future growth. The upbeat tone contrasted sharply with the reality that equity holders were absorbing the cost of a business model highly exposed to global travel shutdowns.

Then there are resources juniors. It’s common to see explorers or developers announce discounted placements described as “strongly supported by institutional investors” to “advance flagship projects.” Technically true — but often the need for fresh capital reflects cost overruns, lower commodity prices, or earlier overly optimistic feasibility assumptions. The optimistic framing rarely highlights how many times shareholders have already been diluted.

Conclusion

The playbook is consistent. A discounted raise becomes a “cornerstone-backed institutional placement.” Debt covenant pressure becomes “proactive balance sheet management.” Asset sales to plug holes become “portfolio optimisation.” Guidance downgrades are wrapped in “revised expectations reflecting market conditions.”

None of the statements are necessarily false — but they often omit the underlying admission: things are not going well. For investors, the tell is not the adjective in the headline, but the context.