Call us crazy, but the thought occurred us in the last few weeks that there might be stocks that have gotten crushed in the last few weeks that we don’t actually own. Hard to believe given how many we did.

So, we after stuffing portfolios full of what we knew and owned and liked and liked a lot more lower, we started hunting. And we found some great businesses, brought old work up to speed in a hurry and bought them dirt cheaply. And then there are those in which we were starting almost from scratch. We read everything in sight, we build a reasonable model and we placed a call into Investor Relations to get the party line and lay of the land on the historical changes and details which were not self-evident. It turns out that the IR rep was gone and the company was using outside Investor Relations. We called them and were told on March 24^th, 2020, that the company was in their “quiet period” and no one was talking to outside investors. This company reported earnings in the last few days of February.  So this “policy” is in place until the end of May? In this world? For a stock that just went from 60 to 25 in this mess?

And thus ensued Bronchick Rant #49:

THERE IS NO LEGAL OR SEC RULING THAT PROHIBITS COMPANIES FROM TALKING TO INVESTORS AT ANY TIME. Rule FD was created to restrict the distribution of information to favored investors ahead of others, which has nothing to do with how we invest or our quest for background information.  I will also note we have had ten conversations with CEOs from holdings and possible holdings in the last week as they were scared pantless about the price of their stock and thought it might be a good time to show some transparency and openly communicate with people about their culture, management discipline and what they are doing in a time of crisis. LEADERSHIP.

Often, we have found that senior management doesn’t know everything that goes on, and Investor Relations can fall into that black hole, so I left a message with the CFO, explaining ourselves. The following email is what I got back, and my response is noted.

The names and company have been omitted for sheer honor and decency: ours.

Dear Jeff,

Thank you very much for your support of and interest in XXXX Inc. XXXX values its investor relationships, and management dedicates a significant amount of time participating in investor calls, conferences and face-to-face meetings. XXXX is committed to complying with Regulation FD of the Securities and Exchange Commission, which addresses selective and public disclosure of information. To maintain our compliance with Regulation FD, XXXX has followed and continues to follow a Quiet Period Policy prior to quarterly earnings reports.

Our executive and investor relations team will not be available to respond to any financial inquiries, participate in phone calls or provide any updates on operational matters during our quiet period.  XXXX is currently in a quiet period for the first quarter ending March 31, 2020.  Our quiet period will extend until the date we publicly issue our first quarter earnings release. Exceptions may occur at the Company’s discretion based on any need to discuss breaking news or otherwise, and in such situations XXXX will follow Regulation FD guidelines.

We appreciate your assistance and support of our compliance with this Quiet Period Policy.  We are happy to schedule a call with you for the period after our Quiet Period ends.

And the response:

I will say the following and I think this almost a Board level issue – letter to follow. I would say it is probably likely I have done this longer and studied the issue harder than anyone on this email. THERE IS NO LEGAL OR SEC RULING THAT CREATES A QUIET PERIOD.

I understand you are EX an IR person and are using 3^rd party IR in the meantime. That said, in the midst of the worst financial crisis since 2009, and after blowing up your guidance that a new CEO gave shortly after joining, that you are choosing NOT to engage serious investors at ALL reflects TERRIBLE policy. My guess is people on this email are paid to think good IR is important as a public company and a healthier than not valuation is also a valuable corporate finance tool. I happen to agree.

So all I can say is that what you are doing is simply dumb. We have had ten calls with CEOs of both holdings and possible holdings in the last week – they are getting in FRONT OF INVESTORS and demonstrating thoughtfulness, management discipline, transparency and their culture. What are you doing?

If we owned the stock, I would almost be chartering a plane and standing in front of your HQ berating this decision.

Seriously – take some advice and re-read this. I am sending a version of it to your Board of Directors.

JB