New Class-Action Lawsuits Lurking: Tips for ADA Compliance on Websites, While Doing the Right Thing

Recently, several of our California-based clients received letters from attorneys who are allegedly representing disabled persons, stating that those clients’ investor relations websites are not fully WGAC and ADA compliant.

With each communication, the attorneys specifically cite “not compliant for blind persons.” In some cases, they are requesting remediation within a certain timeframe. In other cases, however, real monetary damages were sought.

Is this ambulance chasing or a real problem?

According to the CDC, 61 million Americans live with disabilities. The U.S. Census Bureau says that almost 19 million Americans have difficulty seeing or hearing.  Many websites, including investor relations websites, do not currently make accommodations for these users.

For blind people or those with low vision, images without text equivalents, certain fonts and colors, and PDF documents can make websites difficult to navigate. A recent article from NBC News details efforts by disability advocates, including that “federal lawsuits claiming websites are not compliant with the ADA rose by 12 percent last year.” 

Companies, publicly traded or not, should do whatever they can to provide a solution, so as not to leave anyone behind, as well as to be compliant and reduce the threat of legal action.  Of course, regardless of the threat of legal action, it’s the right thing to do.

But where does one start? 

First, some basic definitions:

  • WGAC – Web Content Accessibility Guidelines – Developed in cooperation with individuals and organizations around the world, WGAC has a goal of providing a single shared standard for web content accessibility.
  • ADA – Americans with Disabilities Act – Put into law in 1990, the ADA seeks to provide equal opportunity for individuals with disabilities.

Second, there are several tools to determine how closely a website is to being compliant:

  • The WAVE Web Accessibility Evaluation Tool allows a company to identify accessibility and WCAG errors. Running a URL through the tool will provide summary of accessibility errors.
  • Similarly, Web Accessibility by Level Access allows a company to determine the “health” of a site. There are many others, some free and some paid. (We are not endorsing the veracity of any.)

Once a determination has been made that changes or additions are necessary to ensure WGAC and ADA compliance, here are some practical tips:

  • Take a look at the WGAC guidelines to familiarize yourself with the requirements.
  • Have your website developer (both for your corporate and IR sites) run your sites through a tool like those listed above to see exactly what changes need to be made.
  • Considering purchasing code (usually a widget) that helps makes your website more compliant. There are several, and again, we are not recommending any particular vendor. Be aware, however, that these widgets are not without issues (see the NBC News article referenced above and this one at Forbes.com) and are not a panacea.
  • Recognize that if your corporate site is accessible, but your IR site is not, you are out of compliance. Similarly, if the home page of your corporate site and IR site are accessible, but the pages beneath that are not, you are out of compliance. Even if everything looks great, but you haven’t remediated PDF documents posted to the site, you are out of compliance.
  • Remember that websites are not static.  Any time a change is made to content, links, colors, etc. you run the risk of non-compliance.
  • Work regularly with your legal team to ensure you’re on top of all current and future regulations and requirements.

Laurie Berman, lberman@pondel.com

SPACs: No Small Potatoes, and Still Growing Like an Idaho Spud

It is nearly impossible these days to avoid SPACs, which most of you know by now stands for Special Purpose Acquisition Companies.

According to SPAC Insider, there were 226 SPAC IPOs from 2009 through 2019, compared with 248 in 2020 alone. No small potatoes as a financing vehicle, SPACs this year will experience yet another spurt of explosive growth.

Mark Y. Liu, partner at Akerman LLP, who hosted a recent webinar on the topic, said those 248 SPACs raised $83 billion last year. Amazingly, 550 SPACS were in registration as of March 31, 2021, looking to raise $162 billion more. And SPAC Analytics reveals that SPACs made up 55 percent of all IPOs in 2020 and 76 percent of those thus far in 2021.

Sometimes known as “blank check” companies, SPACs are typically publicly owned shell companies with no operations, but with mandates to acquire private operating companies, usually in a specifically stated sector. If the SPAC does not complete a transaction within 18-24 months, it is liquidated, and funds are returned to the company’s investors. 

Trend or a fad? 

SPACs are growing like Idaho spuds and loved by investors.

While the numbers appear to say “trend,” Business Insider recently noted that investor appetite for SPACs is declining. Additionally, SPACs have come under scrutiny by the SEC over reporting, accounting and governance practices.

On the other hand, and supporting the trend side of the equation, Goldman Sachs estimates that that SPACs could drive $900 billion in M&A enterprise value in the next two years, with nearly $129 billion of SPAC capital currently searching for acquisition targets.

James Keckler, from D.A. Davidson’s investment banking group, and on the webinar with Liu, noted a few things to watch for on the horizon. He believes SPACs and their acquisition targets will get even bigger; that celebrities will continue to increase their involvement with SPACs; and that there could be multiple companies involved in a SPAC merger, versus the typical one-to-one model currently being utilized. Does that mean conglomerate?

The real question:

Are SPACs good for sponsors, the acquired companies and investors? The answer according to Liu, and others, is a resounding “yes” for all three. 

For SPAC sponsors, the benefits include access to capital markets, founder warrants and common stock incentives, and the ability to use both cash and stock for acquisitions. For potential acquisition targets (this one comes from Covington Capital Management), the ability to skip the tedious process of filing a registration statement and bypass a roadshow is attractive. And for investors, the positives include redemption rights, $10 per unit liquidation value and liquidity. 

On the downside, and not that much different from any company going through the IPO process, are the costs of going public, the reporting requirements, market oversaturation, and as some industry watchers have noted, SEC scrutiny (although this could be a good thing for investors).

Whether one is a SPAC investor, merging a company into a SPAC, or forming one, below are a few sound principles to practice:

  • First, a public company is a public company. No matter the capital structure, management team or industry, all rules and regulations governing exchange-traded securities must be closely followed.
  • Next, it is vitally important that communications are complete and transparent, both requisites to build credibility and a loyal investor following.
  • Third, fourth and fifth, research the management teams and their backgrounds; understand what the investment opportunity is really about; and ensure that the language in all documents is easy to understand, with jargon kept to a minimum.

Lastly, although there are many more “secrets” that we readily share with our clients, please know that SPAC formation, merging, and investing are not necessarily quick ways to riches. Old fashioned performance, and maybe even going public through the tried-and-true method established by the SEC in 1933, usually will win out in the long-term. But for right now, SPACs are growing like Idaho spuds and loved by investors.

Laurie Berman, lberman@pondel.com

Roger Pondel, rpondel@pondel.com

Almost There and Entering Yet Another New Comfort Zone

One year into the pandemic, it is clear that our personal and business lives have changed in so many ways, some of which will become permanent. We were forced to step out of our comfort zones, and what became a new comfort zone for many is about to change again, this time in a positive way. We are almost there.

Over the recent months, PondelWilkinson conducted an anecdotal survey among those with whom we regularly interface – corporate executives, analysts, business journalists, investors, among others. We asked about comfort zones and life changes.

Sans reciting statistics, here are some random thoughts of what we learned, in no particular order:

Photo credit: Roger Pondel
  • Most people are working odder and longer hours from their home offices, but with generally less stress.
  • We are seeing our clients much more often, albeit not in person.
  • Productivity has improved significantly, with no more time wasted on daily commuting and out-of-town business trips.
  • Zoom fatigue is far less taxing than jet lag fatigue.
  • Lunch times have gone to about 15-20 minutes from about 45 to 60 minutes, and to a feeling of almost being free from an average daily spend of about $15.
  • It ispossible to complete financings, including IPOs, 100 percent virtually.
  • It is possible to do a non-deal-road show in one’s pajama bottoms. “I will never do an old-style road show again,” quipped more than one CEO and CFO.
  • Activist investors built foothold positions during the early pandemic stages when valuations tanked. Today, those investors are beginning to flex their muscles and raise their voices.
  • Retail investors, with more time on their hands, are investing more and taking up more of management’s time.
  • A new investor spotlight is shining on ESG considerations, and companies need to pay attention.
  • Many annual meetings will remain virtual from now on. Chocolate chip cookies at those meetings are pleasures of the past.
  • M&A transactions came to a halt, but they are roaring back.
  • Fewer cocktails are being consumed. Huh?

Most respondents said we are “almost there,” meaning back to some degree of normalcy. But most believe that a majority of the populace will continue to wear masks for years to come, particularly on airplanes and in group meetings, and certainly for the remainder of 2021.

About stepping out of one’s comfort zone, my therapist wife is an advocate of doing so purposely, especially in times like these. While there has been no choice about accepting changed routines, she believes it is critical to proactively embrace them, along with seeking new challenges. More than that, she says, “It is proven that those who regularly step outside their comfort zones become more emotionally resilient and creative and hold distinct cognitive advantages over those who do not.”

Aside from working at home, I recently stepped out of my comfort zone in a number of ways. I have become a bird photographer on early morning jogs. I now bring out the garbage without being asked to do so, almost every day. I help with the dishes, almost regularly. And sometimes, I even surprise my wife by making the bed … a tip for which I must give credit to our long-time corporate counsel, Gary Freedman.  

“Increasing the number of tasks one can handle and doing altogether new things propels personal and professional development,” Fay Pondel says. “Getting comfortable with being uncomfortable stimulates innovation. Embracing the unnervingly unfamiliar opens oneself to accomplishing more than ever dreamed possible and leverages untapped potential.”

Are we back to normal yet? Almost.

Roger Pondel, rpondel@pondel.com

When the Viral Fog Lifts

Those who live in Southern California fully understand the terms “May gray” and “June gloom.” It’s that time of year when the sun comes out late afternoon. The temperature isn’t that cold, but gloominess permeates the air and stays around for most of the daylight hours. Most people hate it.

This year, at least for those who live in Los Angeles, the pre-summer grayness is no big deal. There’s a lot more to complain about than the weather.

Regardless of who you ask, or what television news station you watch, when that sun is fully bright again, there is consistent agreement that a “new normal” will surface. I am not one for pontificating about what’s ahead, especially when so much of the future remains racked with uncertainty. But in our niche of investor relations and strategic public relations, I will throw caution to the wind and make a few prognostications about how our sector already is transforming:

  • Few, if any, in-person non-deal road shows (NDRs), but plenty of virtual ones. CEOs and CFOs will love that. It will keep them in the office and save lots of time, to say nothing about eliminating many expenses, like air fare, hotels, limos, fancy restaurant meals. Virtual NDRs are in. They may be easier to schedule, but they must be visual and engaging to hold interest. Hello Zoom.
  • Virtual annual meetings already are the new norm. They will be on the rise and probably never go away. CEOs and CFOs may like that, too, but investors may not. Management will control the question and answer chat button, and the democratization of public companies may take one giant step backward. So watch carefully for a rise in activism for those companies that aren’t communicative and transparent, aren’t performing and aren’t unlocking shareholder value.
  • Desk-side briefings with journalists are history. There are fewer business journalists these days, anyway, and their time has become quite limited for casual background coffee klatches. A phone call or video interview will have to do, but there had better be something cogent to say.
  • Quarterly conference calls will become even more important. But management teams sorely need to interject more life into their presentations and not merely recite numbers. Yes, they will likely still be scripted, but it would be better if they could be turned into quarterly Zoom fireside chats for the Q&A portion.
  • Investor days are still important, but as with annual shareholder meetings, for the foreseeable future, they will be virtual. This will save money, possibly attract more attendees, and eliminate the free-lunch bunch. But to be effective, they need to be live, and engage with the audience, or attendees will be distracted while management drones on.  
  • Virtual investor conferences already have arrived and will likely increase in number. But be careful which ones to attend, either as a presenter or an investor. They can prove to be a waste of time. From the issuers’ perspectives, it’s important to know who’s really paying attention. Is anyone really listening? Sponsors should do whatever it takes to do it right, such as using video to make it worthwhile and come alive.
  • Assure that “out-of-sight, out-of-mind” syndrome does not set it. With much of the above happening in the privacy of one’s home office – or at least not in the offices of investors and analysts – greater attention must be paid to messaging for those who are listening.

The times, and the market, are changing fast. Balance sheets are more important than ever. Investors are looking for corporate measures to assure that capital is being deployed in value-accretive activities. With fewer, if hardly any, companies providing financial guidance, investors want to see actions that can translate into trackable metrics. They want to hear from management teams more often, and perhaps in new, or old, ways, like maybe bringing back the quarterly report. And once regarded principally as feel-good commentary, stockholders today look increasingly to investing in companies that focus on environmental, social and governance measures.

Unlike a CEO of a publicly traded company providing financial guidance on a quarterly earnings call – with significant consequences if wrong – no real harm has been done if my forecast for the future of investor relations is wrong. And maybe, just maybe, if I am right, the transformation will be good for all when the viral fog lifts. Except, of course, for missing some great meals in those fancy New York restaurants while on an NDR.  

Roger Pondel, rpondel@pondel.com

The Danger of High Flying Startups

WeWork, once a darling of Wall Street, even before its planned IPO, has been in the news a lot…and not because its stock price is flying high after going public.

In fact, as those in the investment community well know, WeWork recently pulled its IPO amidst investor doubts about the company’s valuation and concerns about corporate governance, according to the Wall Street Journal.

A follow-up WSJ story covered the incredible downfall of the company and its CEO, who has since been relieved of his duties, removing him from the company he started in 2010. According to an editorial in The Washington Post, “This might be the most spectacular implosion of a business in U.S. history. Other failures were bigger, in mere dollars. But WeWork has to be the most literally incredible. Profanity seems somehow inadequate. It’s just . . . holy wow.”

This spectacular implosion points to WeWork’s former CEO, Adam Neumann, whom The Atlantic called the “Most Talented Grifter of Our Time.” That’s saying a lot, given the downfall of Theranos due to its founder, Elizabeth Holmes, and the billions stolen by Bernie Madoff, pyramid schemer extraordinaire.

Looking at some of Neumann’s actions, it seems like the writing was on the wall.

For example, during a courting process by Nasdaq and the New York Stock Exchange, Neumann was said to have asked if the exchanges would ban meat or single-use plastic products in their cafeterias. A noble thought for sure, but one has to wonder what kind of power Neumann thought he could wield. While working on the company’s S-1 in preparation for the IPO, Neumann’s wife, also WeWork’s chief brand officer, insisted it be printed on recycled paper, but rejected early printings as not being up to snuff. This set the process back by days, because the original printer refused to work with them anymore. Earlier in his history, Neumann is reported to have claimed that he wanted to become “leader of the world, amassing more than $1 trillion in wealth.” While a successful CEO needs to have a healthy ego, these vignettes point to someone whose ego passed healthy, all the way to downright irrational.

SoftBank Group eventually bailed WeWork out through a $10 billion+ takeover, which, according to Reuters, gave Neumann a $1.7 billion payoff. That’s a lot more than the company’s currently estimated $8 billion valuation, but not even close to the $47 billion valuation it supposedly held in January.

Can the WeWork story provide insight for future start-ups and for venture capitalists who fund them?

For one, the financials, operations and inner workings of a company matter. When a high-profile unicorn, with a tremendous pre-IPO valuation files an S-1, the details become public and scrutinized by a lot of very smart investors. If a company is not on solid ground, with a strategic plan that can be effectively implemented, it’s probably not ready to go public. Additionally, when a CEO of a high-profile unicorn, with a tremendous pre-IPO valuation has delusions of grandeur, it’s probably not a great idea to back him or her, unless they have proven their worth.

While there’s no cookie cutter mold for determining which companies and CEOs will ultimately be successful, quality should be the rule, among many other warning signs that should be heeded.

Laurie Berman, lberman@pondel.com

Taking America’s Pulse Online

The Pew Research Center recently announced it would be conducting the majority of its U.S. polling online, much like most other public opinion surveys these days.

Until recently, phone-based surveys were the de facto standard for opinion polls. According to Pew’s own research, the number of surveys conducted over the Internet “have increased dramatically in the last 10 years,” driven by available technology and lower costs.

What shifting to online polling means for our long-term phone survey trends | Pew Research Center

The paradox is that people respond to online and phone polls differently. Pew calls this the mode effect, when responses to some of the same questions are different depending on the interview format.

For Pew, switching to online polling after years of telephone surveys will have an impact on quantifying historical data. This also may influence how media report on the center’s year-over-year trends.

Online polling methodologies may be shaping a new generation of survey taking. The good news is that trusted pollsters are transparent about these approaches.

And when it comes to the pros and cons of online vs. telephone surveys, a simple Web search will yield myriad results, including observations from Pew, as well as in Forbes.

Most polling firms and universities use a combination of online and telephone survey methods. It’s essential, however, that online surveys produce statistically accurate data, especially when the results are used by media.   

To help ensure reporting accuracy, the National Council on Public Polls published a list of 20 questions a journalist should ask about poll results. The irony is that reporters don’t have time to review questions because of today’s ultra-competitive “real-time” news environment. 

General consensus says polls serve a greater good helping define public opinion on everything from brands to policy. Media love surveys too. So much so that The Hill launched “What America’s Thinking,” a Web TV show that focuses on the latest news about public opinion.

As storytellers, we rely on accurate trends to help shape different narratives on behalf of our clients, whether that data is derived from the Web or via telephone.

— George Medici, gmedici@pondel.com

The Best Donut in Los Angeles

WARNING:  You have to read this entire blog post to know where to find the best donut in Los Angeles.

With third-quarter earnings season nearing its sunset, the year is practically over.  OK, OK, let’s not get too far ahead of ourselves.  But seriously, what does 2019 hold for capital markets?  Um, uh, well, that’s hard to say.  A few preliminary ideas from the IR observation deck:  Investors will care even more about diversity at the board level, cash preservation or lack thereof will weigh heavily on investors’ minds, and public companies will feel more pressure to perform on a quarterly basis to justify high stock valuations.

Indeed, these variables have already surfaced in 2018, particularly in California.  A California law passed in September that requires all publicly held companies based in the state to have at least one female board member by the end of 2019.  The law goes further by also requiring companies with at least five directors to have two or three female directors by 2021.

At the same time, continued volatility in the market and rising interest rates are influencing companies and investors alike to carry more cash on their balance sheet.  This trend will likely persist as the Fed partakes in gradual interest-rate increases in 2019.  That being said, investors don’t necessarily have the patience to watch a lot of cash sit idle on a balance sheet, so use it wisely.

Speaking of patience, high U.S. stock valuations will require companies to prove their pudding is still the best pudding around, and the onus will be on IR professionals to ensure that stellar financial performance is communicated effectively.

There are a number of other IR-related topics to consider for 2019, such as the continued effects of MiFID II, how artificial intelligence will influence IR, and the best place to eat a donut in Los Angeles when you’re on an NDR.  But for now, let’s just get through earnings season.

— Evan Pondel, epondel@pondel.com

Class Action Litigation on the Rise: How Safe are Safe Harbor Statements?

History has a way of repeating itself. With 2017 statistics of all kinds starting to be compiled, one offered by the Stanford Securities Class Action Clearinghouse should make public company management teams and their boards take notice: the number of securities class-action lawsuits is on the rise … in a startling way.

 

The clearinghouse reported that the number of annoying and costly public company securities class action lawsuits increased to 413 in 2017, up from 213 in 2016, and up from an average of 190 in the years 2002 through 2015.                        

                                            

classaction_law

Law firm Wilson Sonsini Goodrich & Rosati recently issued a paper highlighting the trend, which can impact companies of all sizes, from micro- to mega-cap. The three biggest reasons for the suits are material misstatements or omissions in registration statements and prospectuses for IPOs; challenges to merger and acquisition transactions, many if not most of which defense lawyers say are boilerplate in nature and meritless; and greater scrutiny by the SEC to disclosures being made by private companies.

 

Disclosures, or lack thereof, in press releases, which are totally in management’s control, often play a role in such lawsuits. While most companies are careful about including safe harbor statements in their press releases, which offer some legal protection, many companies do not use those statements properly. Often, they fail to customize those paragraphs to include the actual forward-looking statements mentioned in the press release. Worse yet, sometimes the safe harbor paragraphs are being included as boilerplate, even when there are no forward-looking statements at all.

 

Remember the term, “You’ve been Lerached?” A couple of decades ago, class action securities lawsuits were rampant, with a San Diego-based law firm, long since shuttered its doors, leading the pack in filing them. The firm’s principal ultimately went to jail for fabricating many such suits, looking for plaintiffs to buy a few shares of a given company, allegedly based on a CEO’s statement about future performance, then at the first sign of non-performance, voila, the company was “Lerached,” with the term affectionately named after lawyer Bill Lerach. Copycats followed.

 

Many of those lawsuits were legit, and they ultimately gave birth to the Private Securities Litigation Reform Act of 1995 and the safe harbor statements in press releases, followed by Reg FD in 2002. But despite the safe harbor protection, a case involving guidance issued in a press release by Quality Systems last July may signal a frightening change: The U.S. Court of Appeals for the Ninth Circuit, which governs California, reversed the district court’s dismissal of a securities fraud suit, saying various aspects of the safe harbor were “hostile in tone and application, when compared to many prior forecasting decisions.”  

 

What does all this mean?  Maybe nothing, but today more than ever, it pays to listen carefully to your SEC lawyer and to your investor relations advisor on all corporate communications matters. It also may be a good idea to place close attention to those safe harbor statements, and be sure to stay tuned as to whether those statements turn out to be not so safe as hoped.

— Roger Pondel, rpondel@pondel.com

 

 

 

Read Any Good Books Lately?

I really enjoyed McKinsey & Company’s piece on what CEOs are reading in 2017, which is a continuation of an annual list going back several years.  Not only did it provide interesting recommendations about what to add to my Kindle library, but seeing what’s in the minds of leaders makes them a bit more relatable.  Not surprisingly, the list is overwhelmingly non-fiction, however, I’d recommend more fiction for a bit of escapism, which is likely needed given CEOs daily demands, and because there are some lessons to be learned from non-fiction storytelling.

Some of this year’s titles include:

  • Serial Innovators: Firms That Change the World by Claudio Feser
  • Sun Tzu: The Art of War for Managers: 50 Strategic Rules Updated for Today’s Business by Gerald A. Michaelson and Steven W. Michaelson
  • Good to Great: Why Some Companies Make the Leap . . . and Others Don’t by Jim Collins.  CEOs surveyed by Fortune named this book “the best business or management book they had ever read.”
  • Zen and the Art of Motorcycle Maintenance: An Inquiry into Values by Robert M. Pirsig

I suppose I’m not alone in my interest in lists like these, as several media outlets have reported on CEO reading over the years.  Business Insider noted books like The Remains of the Day by Kazuo Ishiguro as being a favorite of Jeff Bezos who once said that he “learns more from fiction than non-fiction” (I’d note here that I pointed that out earlier in this post before I even saw that Jeff Bezos said it).

Tim Cook took the non-fiction path with Competing Against Time: How Time-Based Competition is Reshaping Global Markets by George Stalk, Jr., and Thomas M. Hout, which he is said to distribute to new Apple employees and colleagues.  The Road to Character byDavid Brooks was cited by Pepsi’s CEO, Indra Nooyi, as providing an understanding that “building inner character is just as important as building a career.”

Rounding out the recommendations, Forbes recently listed Shoe Dog, by Phil Knight, Competing Against Luck: The Story of Innovation and Customer Choice by Clayton M. Christensen, and Who Says Elephants Can’t Dance? by Louis Gerstner, Jr. as popular CEO choices.

Have you read any of these books?  Others you’d like to recommend?  Let us know in the comments section below.

— Laurie Berman, lberman@pondel.com

Frothy Market Prompts Old Tactic with a Twist

wolfThe market was hot, and virtually all participants were making money.

Around the time that the movie, “The Wolf of Wolf Street” was out, folks in the IR industry were rolling their eyes a lot. The hyper, cold-calling brokerage salespeople depicted in the movie—but taken from real life—did almost anything to establish new accounts and sell penny-stocks to unsuspecting clients.

Their tactics usually began by offering shares in a well-established company, as a safe, relatively risk-free investment, helping to establish credibility. Then weeks, sometimes days later, they would call again, touting a sure-bet penny-stock that no one ever heard of, but that they knew was about to go through the roof. The purchase, of course, had to be made on the spot, prior to the stock rising, since it certainly was going to happen very soon. The brokers usually were paid by the issuer or by a stock promoter, in addition to garnering a commission from the unsuspecting mom-or-pop investor.

Another penny-stock, promoter-driven tactic during that era was the use of fancy, glossy-printed fliers, occasionally stuffed into the plastic bags of newspapers that were delivered to thousands of homes.

That was then. What about now?

The market is hot, and virtually all participants are making money.

A few months ago, I wrote about some Wolf-like cold calls I was beginning to receive, on my cell phone, no less. And just last week, stuffed into the plastic package with my still home-delivered Los Angeles Times (OK, I get the New York Times digitally), was a glossy stuffer promotion for a recent IPO, “Now Nasdaq Listed: BHF,” read the heading. Only this was not for a penny-stock.

I was mildly shocked that any stock was being promoted this way, and even further surprised to learn that the company, Brighthouse Financial, is not some sleaze-ball publicly-traded shell with no revenue or earnings, but a real company, an annuity and insurance seller, with $223 billion in assets.

Perhaps this sort of tactic again will become a trend. And in this scenario, because the company is real and not even close to penny-stock status, maybe the tactic will work.

But wait. On the first day of trading, August 7, the shares fell 4%, closing at $60.72. And digging a little further, it is interesting to note that while MetLife still owns 20% of Brighthouse, a filing said it plans to sell all of its holdings “as soon as practicable.” I wonder what they know that the rest of the investors do not. Same ole promotion resurfacing with a twist…at least the issuer has assets.

Roger Pondel, rpondel@pondel.com