One of our larger holdings agreed to sell itself last week at what we would consider a fair price. This has been a long and winding road that involved “activeness.” As noted in our November 21, 2019 SEC filling:

CSC has carefully monitored the Issuer’s difficulty over a multi-year period in achieving acceptable revenue growth, the associated lack of acceptable profitability, the management changes, and the systems implementation problems. In light of the recently announced sale of the Tuition Program Management at a multiple of 3 times revenue when GPX overall sells at a multiple of .5 times revenue, CSC believes that GPX is severely undervalued and there is a material question mark regarding the risk-adjusted present value of management’s operating plan. Therefore, it is incumbent upon the Board of Directors of GPX (the “Board”) to explore strategic alternatives that could further highlight the underlying value of the Issuer versus its current share price. The Reporting Persons expect to engage the Board and the management team in this process and thus are changing their filing to “Active” status.

Getting people to see things your way in a corporate setting is an interesting dynamic. Sometimes it’s worse than interesting as darker human motives can surface that call into question quaint notions of “fiduciary responsibility.” In this case, that was not the case, but some elbows needed to be sharpened as it is not always easy for people to understand that “Plan A” has had sufficient time to be proven simply not doable. GP Strategies “needs” a larger platform in order to properly cross-sell and better monetize their IP across a global scale. It was highly unlikely to achieve it on their own.

Additionally, we have sometimes found it the case that what seems like a good idea in a conference room is completely the antithesis of what the “market” is looking for. Case in point – CEO Adam Stedham – was originally made interim CEO after the effective retirement of long-time CEO Scott Greenberg. Not a good idea in our view. Adam knew what he was doing, and needed the authority to do it. He was made “official” CEO shortly after the first press release, with a little help from certain shareholders. And to his credit and we thank him for it, he transcended the natural temptation to see his ascendance to the top job as the beginning of a reign. He will now be known as “the guy who took a single-digit stock, cut costs, made great asset sales at accretive to shareholder prices, and got the company sold for shareholders at $20.85.” His resume may be available for your review! It was the right move in the right company at the right time, and to get management and the Board to see this for what it really was is, and without a public abuse program…is sadly much more rare than it should be. Thank you team GPX.

We continue to espouse and execute an investment philosophy and process that states that value is “optimized” via small groups of people with skin in the game. Shareholders are still “stakeholders” and it makes commonsense that we should be speaking to management and Boards as partners who are active observers. “Stocks” are not just pieces of paper to be quantitatively traded or included in one of three million indicies.(Look it up.) They are small pieces of ownership and if you don’t think that owners need to be properly and actively represented today, then you are missing a big piece of what is happening today. And money.

Thank you to all.

CSC