Wednesday, September 26, 2012

Net-Net Solitron's Bizarre Behaviour

Communicating with management is something many shareholders like to do. But it's not always easy. My belief is that if you're not calling on behalf of a name-brand Wall Street firm, most managers have little time for you. Consider the treatment experienced by a value investor who tried to communicate with the CEO of Solitron Devices, a company whose shares trade at a large discount to its net current assets.


pietje said...

I agree it is not very appropriate behavior. On the other hand, try looking at it from the perspective of Solitron. According to businessweek this Joseph Schlig is 84 years old. Maybe he's already living in a nursing home and feels he is being stalked, so he asked his old buddy if he could do something about it.

And Sharaf is managing the company. The guy probably feels he has better things to do than replying to a ten page letter request filled with questions from a shareholder who bought 1000 shares last week and expects immediate results. Somebody who, from his perspective, might be fishing for inside information.

I am not condoning anything. The company _should_ appoint new board members. However, this is a company with $8m sales annually, no Berkshire or Exxon Mobil. I wouldn't expect them spend much time on shareholder relations.

Nate Tobik said...

Comments and attitudes like this are why things never change. A share in ANY business is a partnership agreement between the shareholder and company. It doesn't matter if the company does $2m in sales or $2b sales, a shareholder has the exact same legal standing.

I would expect small companies to care more about shareholders. There are less of them, and most likely they are more interested in the actual business. Hi many shareholders does Exxon have? Maybe millions? How about Stephan Co, 152.

If a director is in a nursing home or too old to bother with the phone why should he be entrusted to take care of shareholder interests? He can't plain and simple, he should be booted from the board.