Fortescue shares red-hot as court reveals company espionage

Fortescue's intellectual property legal pursuit descends into professional spying.

| More on:
Miner and company person analysing results of a mining company.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

Despite controversial murmurs of company-led spying, the Fortescue Ltd (ASX: FMG) share price is moving with a spring in its step today.

In afternoon trade, the iron ore miner's shares are up 3.5% to $22.70. However, the exuberance is not isolated to the mining company Andrew Forrest founded in 2003. As this is being written, materials are leading the Australian share market, climbing 2.26%.

Yet, today's rally is somewhat shrouded in contention as details of an investigation emerge.

Money spent on spies

In June, Fortescue launched legal action against Element Zero, a green metal startup started by former Fortescue employees Michael Masterman, Bart Kolodziejczyk, and Bjorn Winther-Jensen.

The case alleges that the ex-employees smuggled green iron intellectual property out of Fortescue and applied it at Element Zero, committing "industrial-scale misuse." As such, Wither-Jensen and Kolodziejczyk have been the targets of an investigation to substantiate these allegations.

According to newly released court documents, Fortescue hired private investigators to 'spy' on its former employees (Wither-Jensen and Kolodziejczyk) and their families to obtain information needed to issue search warrants.

Fortescue hired the investigators, who followed the two executives, locating and photographing their homes, wives, and children.

The court documents show surveillance at Kolodziejczyk's family home continuing after the Element Zero co-founder departed from the Melbourne airport, with the investigator's notes reading:

In the meantime, surveillance continues at the Hadfield, Victoria residence, where Dr Kolodziejczyk's wife and child are permanently residing.

Following the surveillance, both former employees were subjected to raids on their homes. The Element Zero co-founders were required to relinquish passwords to their devices — including those of their family members — for copies of their data to be taken.

Both men completely reject the claims made by Fortescue.

Iron ore reignites Fortescue shares

Fortescue investors seem to be more focused on the price of iron ore, with shares rallying today.

Following a rough month in June for the steel-making commodity and Fortescue shares, prices have been on the uptick this month. Iron ore is fetching around US$110 per tonne, rising nearly 4% from late June.

Created with Highcharts 11.4.3Fortescue PriceZoom1M3M6MYTD1Y5Y10YALL3 Jan 20244 Jul 2024Zoom ▾Feb '24Mar '24Apr '24May '24Jun '24Jul '24Mar '24Mar '24May '24May '24www.fool.com.au

The revitalisation arrives amid stimulus measures announced by Beijing to support its struggling property sector. As part of the measures, people in China will see mortgage interest rates and the minimum down payment reduced.

Fortescue shares are closely linked to China's property market. In 2022, approximately 88% of the company's revenue was derived from the People's Republic.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A man slumps crankily over his morning coffee as it pours with rain outside.
Materials Shares

Why is this ASX 300 lithium stock sinking 17% today?

What's going on with this lithium stock today? Let's find out.

Read more »

Man holding a calculator with Australian dollar notes, symbolising dividends.
Materials Shares

$10k invested in Pilbara Minerals shares 5 years ago is now worth…

Let's see if this lithium miner delivered the goods for investors.

Read more »

Female miner in hard hat and safety vest on laptop with mining drill in background.
Broker Notes

Experts reveal 2 buys and 1 sell in the ASX 200 materials sector

And they're not all mining companies, either.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Materials Shares

Pilbara Minerals shares jumps 10% on big news

This lithium miner is having a day to remember on Wednesday. But why?

Read more »

Three miners looking at a tablet.
Materials Shares

Why Bell Potter says this ASX mining stock is a top buy

Let's see which stock the broker is tipping to deliver big returns.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Materials Shares

Down 39% in a year, why IGO shares still look overpriced

A leading expert doesn’t believe IGO shares are out of the woods just yet.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

This ASX 300 stock is surging 25% on US defence deal

The announcement of a 'a pivotal milestone' is getting investors excited today.

Read more »

A happy construction worker or miner holds a fistful of Australian dollar notes.
Materials Shares

$5,000 invested in BHP shares 5 years ago is now worth…

Will its shareholders be happy with their investment? Let's find out.

Read more »