Apple’s Juice

Setting my own political ideologies aside, it is curious that a publicly-traded company is donating money to oppose California’s Proposition 8 amid one of the worst economic downturns since the Great Depression.
 
A measly $100,000 may not seem like a lot of money to Apple, which has annual revenues in the tens of billions of dollars. But is the company sending the right message to the Street when volatility is at an unprecedented high?
 
Such actions beg the question whether public companies are obligated to take a neutral stance on political issues for the sake of a fiduciary responsibility to shareholders.  In some ways, it seems unfair to contribute to any campaign at the risk of alienating shareholders who invest in a company for their products, not their politics.

 

Evan Pondel, Vice President, epondel@pondel.com
 
 

The Right Stuff

NIRI (the National Investor Relations Institute) recently reviewed the investor relations Web sites of the 100 largest publicly traded companies in an effort to develop a set of best-in-class practices.  The results were presented in a comprehensive Executive Alert distributed to members.
 
Some highlights to keep in mind when reviewing or building your own IR site:
 

  • Provide direct contact information for the IR team (include both internal and external contacts).
  • Use common names for standard pieces of information to make them more easily identifiable to users.
  • Don’t burry important company messages in your FAQ.  Create separate sections for key information such as shareholder services.
  • Avoid having the site launch new windows as a way of accessing content or functionality.

 
Additionally, certain core elements were found among the Web sites that were reviewed:
 

  • 92% contained earnings press releases;
  • 92% contained stock quotes/charts;
  • 89% provided transfer agent information;
  • 87% offered webcasts;
  • 82% offered e-mail alerts;
  • 80% gave dividend information;
  • 77% included a historical stock price lookup feature and a history of stock splits; and
  • 62% included an investment calculator.

 
If you haven’t looked at the content on your investor relations Web site recently, now is a good time for a check-up.  As we reported here on August 5, 2008, the SEC recently released new interpretive guidance that could give companies the ability to use their Web sites as an appropriate full disclosure outlet.  The more up-to-date and feature rich your site, the better chance you’ll have of meeting the SEC’s Web site disclosure guidelines.

 

— Laurie Berman, Senior Vice President, lberman@pondel.com
 
 

You Know Things are Bad When

…a headline reading, “Citigroup $2.5 billion loss soothes investors” appears on your computer screen.
 
Yes, this loss was better than expected, but how bad have things become when a $2.5 billion loss from any company is something to cheer about?

 

Laurie Berman, Senior Vice President, lberman@pondel.com
 
 

Update: Buffett Lunch for $2.1 Million

Whether Zhao Danyang needed a doggy bag is unknown. What is known is that the investment fund manager paid a little more than $2.1 million for lunch with Warren Buffett at the famed meatery Smith & Wollensky in Manhattan. In the previous blogpost it was noted that the Glide Foundation was hosting an auction on eBay for lunch with Buffett to benefit the charity.

 

PondelWilkinon, investor@pondel.com
 
 

Berkshire Special: Buffett Lunch for $650,000

Last year’s charity lunch with Warren Buffett, the CEO of Berkshire Hathaway and arguably one of the world’s best-known and most knowledgeable stock investors, cost a California-based investor $650,000.  For that sum, the Californian and seven of his closest friends had lunch with Mr. Buffett at Smith & Wollensky, a storied New York City steakhouse.
 
The bidding on eBay for this year’s charity lunch, also to be held at Smith & Wollensky, began yesterday and ends on June 27.  At present the lunch is being valued at $41,100 (the highest of five current bids).
 
All proceeds raised from the auction will go to the Glide Foundation, an organization that is working to alleviate human suffering and poverty in the San Francisco Bay Area.  Mr. Buffett’s charity lunches have raised more than $2.0 million for the organization since going online in 2003.
 
Personally, I think this would be the opportunity of a lifetime, but few of us have enough disposable income for a $650,000 steak (and maybe a glass of wine and a side dish of potatoes au gratin).  Even split eight ways, that’s a hefty $81,250 per person.  I guess I’ll just have to log on the Internet for free after the event to see how it went and whether Mr. Buffett provided any sage investing advice for today’s climate.
 
Given the extreme turmoil in the financial markets of late, how much would you pay for the ability to hear what Mr. Buffett has to say?  Tune back in after June 27 to see the winning bid.

 

Laurie Berman, Senior Vice President, lberman@pondel.com
 
 

Nasdaq Update

Nasdaq recently began placing its relationship managers in the field to keep them geographically closer to the listed companies they serve.  For example, Southern California (from San Diego to Santa Barbara) is now covered by two Nasdaq relationship managers who reside in the region.
 
Listed companies should maintain proactive relationships with their relationship managers as these folks can trouble shoot any issue from compliance to listing standards to bell-ringing ceremonies to renting out the Nasdaq MarketSite in New York City for your next analyst day.
 
We were reminded of a couple of interesting tid-bits when Nasdaq visited our offices recently:
 

  • Nasdaq’s 2008 Core Services for listed companies (which include free webcasts, a dynamic annual report and Board tools, among others) are valued at $25,000.
  • Participation in bell-ringing ceremonies, at the open and close, are market cap driven.  In general, a listed company must have a market cap of $500 million to open the market and $250 million to close the market.
  • Nasdaq’s European investor conference is open to companies with market caps of at least $1 billion.
  • Pre notification to Nasdaq for all press releases is now handled via an electronic disclosure form at https://www.nasdaq.net/ED/IssuerEntry.aspx.
  • Each listed company has a dedicated surveillance account manager called a market intelligence director (MID).  Your MID can provide you with information about large block trades or significant price swings in your stock.  You can work with your market intelligence director to initiate calls when your stock price moves by a pre-determined percentage or when a block of a pre-determined amount of shares changes hands.  You can also call your market intelligence director whenever you need more clarity on how and why your stock is moving.

 
Log on to your company’s Nasdaq home page here for more information.

 

Laurie Berman, Senior Vice President, lberman@pondel.com
 
 

Fed Head Acknowledges Risk

Federal Reserve chairman Ben Bernanke told the Women in Housing and Finance and Exchequer Club today that the U.S. Central bank is prepared to act aggressively to help stem problems caused by the recent housing slump and strains on the credit markets that are putting economic growth at risk.
 
Many analysts who fear that the United States is headed for a recession, reacted positively to the Fed chairman’s remarks and his public acknowledgement that the economy may indeed be in trouble.
 
Bernanke commented that policy makers are now more worried about sustaining economic growth than they are about inflation and pointed to rising oil prices, lower stock prices and falling home values as drivers for hurting consumer spending over the next year.
 
The Federal Open Market Committee, the Fed’s policy setting body, will hold a two-day meeting January 29-30.  Bernanke’s comments today reinforced expectations that rates will be cut by a half percentage point.

 

Laurie Berman, Senior Vice President, lberman@pondel.com