{"id":2345,"date":"2015-12-31T19:02:04","date_gmt":"2016-01-01T03:02:04","guid":{"rendered":"http:\/\/covestreetcapital.com\/?p=2345"},"modified":"2020-09-29T13:43:57","modified_gmt":"2020-09-29T20:43:57","slug":"pretty-shareholders","status":"publish","type":"post","link":"https:\/\/covestreetcapital.com\/pretty-shareholders\/","title":{"rendered":"Pretty Shareholders"},"content":{"rendered":"

As we clean out files and thoughts at year-end, this was a doozy that I think is an interesting view of \u201cshareholder relations\u201d and how badly it can be handled. We simply want to be treated as actual or prospective partners. Think Pretty Women and how Julia Roberts was treated when she entered the boutique in Beverly Hills. The names have been changed to avoid being mean after the fact.
\nThem:<\/strong> <\/p>\n

Hi Eugene,
\nIn regard to the voicemail you left for XXXX. As I’m sure you can imagine, we receive a very high volume of requests for calls with our investor relations team.
\nSince we cannot possibly honor all requests and it sounds like you have many questions that may be very specific in nature, I suggest that you email those questions to me so that I can gather answers and reply as soon as possible.<\/p>\n

Us:<\/strong><\/p>\n

I’ve done the reading and we don’t use sell side for anything, so that would be useless to me.
\nI tried to get my thoughts down on paper for you, however as you can imagine it is difficult to have an investment related conversation via email. These are the questions in general but I would prefer to have a conversation, as I’m sure you will after going over them.<\/p><\/blockquote>\n

Them:<\/strong><\/p>\n

Gene,
\nWow, yes lots of questions, but let’s see which of these I can chip away at prior to a call. Please see my inserts below.
\nNote that a number of your questions are already addressed in our presentation materials, so I’d really appreciate if you could look through the referenced slides carefully before a call in order to make our discussion more productive.
\nWith regard to a call, I’m currently available for a 30 minute call with you at the following times, so please let me know which time would work best for you, if there will be any additional participants on your end, and confirm that I can reach you at 424-221-5897.<\/p><\/blockquote>\n

We have our 30 minute call with Investor Relations…and then…<\/p>\n

Them:<\/strong><\/p>\n

Jeff,
\nIn response to your voicemail request to speak with XXXX regarding some additional questions. I spoke with Gene on June 20th – I don’t recall if you were also on that call. If you have further questions, please email them to me so that we can try to respond in that way. We simply don’t have the bandwidth to schedule an additional call with you until after we report results for the current quarter (likely in early Sept).<\/p><\/blockquote>\n

Us:<\/strong><\/p>\n

With all due respect, this attitude is part of the root problem of what is wrong with this company. If you don’t think you have to treat your institutional shareholders with the respect that owners deserve, then I will be happy to move up the food chain at XXX. As i have done this for a long time, I respect hierarchy and the need for efficiency. That said, we are beyond this and given the mess in which you are currently swimming, we would expect the courtesy of a call this week.
\nPlease let me know what works for you.<\/p><\/blockquote>\n

Them:<\/strong><\/p>\n

Jeff,
\nI’m sorry you feel that way. We’re certainly open to answering questions via email, just as we did with several questions prior to the June 20th call (see below).
\nEven if you feel your questions cannot be covered via email, I’d appreciate seeing the topics you’re asking to discuss.<\/p><\/blockquote>\n

Us:<\/strong><\/p>\n

I don\u2019t mean to be rude, but email is difficult to convey difficult facts with nuanced discourse. This is a $1.9 billion mkt cap company with 2 designated IR people – I have seen companies 10x with zero IR who seem comfortable talking to their owners. If what you are saying is that XXX is not talking to ANYONE – and that means sellside as well – because of some internal policy, I would simply like to know. If that is not the case, then we have a problem. For a company with a stock is down more than half in 12 months, with financial statements that are still an embarrassment with a risk section in the 10k longer than some companies whole 10k, with near complete turnover in the C-slot over the last 6 months, with as much interesting secular chatter as this industry has -and I am not even on the topics of capital allocation, bungled acquisitions and mismanagement in the field – I find it hard to believe that that this company does not think that a highly motivated IR program is a top priority.
\nWe own roughly 1% of the stock as I write. What I would really like is a call with THE CFO to at least understand his approach to financial reporting and the focus of his efforts since joining XXX. I understand the obvious issue of the leadership gap after the reign of XXX, and the reticence to commit to hard targets, but there is plenty of intelligent discourse that can and SHOULD be offered by the company in order to assist new and potential shareholders. Referring us to public documents is NOT an IR program and is frankly somewhat insulting truth be told.
\nI would once again appreciate a phone call.<\/p><\/blockquote>\n

Them:<\/strong><\/p>\n

Jeff,
\nEverybody has to prioritize, right?, and given that our records indicate that your firm has less than $300M of assets under management and no —- held, the time —- has spent answering your questions by phone and e-mail is extensive.
\nFrankly it\u2019s very insulting to us that you have totally disregarded the time she has spent on your account.
\nWe will connect with you if you\u2019re still interested in Sep after we release earnings and after your holdings are filed.<\/p><\/blockquote>\n

________________________________________________________________________<\/p>\n

Postscript:<\/strong><\/p>\n

The new CEO and CFO are a class act who took the initiative after reviewing this exchange and made the appropriate apology call. One of the two IR people were fired. We ended up buying 3% of the company as our assets grew and made 70% on our money.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

As we clean out files and thoughts at year-end, this was a doozy that I think is an interesting view of \u201cshareholder relations\u201d and how badly it can be handled. We simply want to be treated as actual or prospective partners. Think Pretty Women and how Julia Roberts was treated when she entered the boutique […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[81,78,31],"tags":[],"class_list":["post-2345","post","type-post","status-publish","format-standard","hentry","category-esg","category-business-of-investment-management","category-thoughts"],"yoast_head":"\nPretty Shareholders — Cove Street Capital<\/title>\n<meta name=\"description\" content=\"Cove Street Capital— Pretty Shareholders —\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/covestreetcapital.com\/pretty-shareholders\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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