An Investment Opinion
Hello, DuPont? These Are Your Investors Speaking
This very thing has happened on the Fool board for DuPont (NYSE: DD). I had not really picked up on it until this past weekend. DuPont is one of the boards that I can normally let go for a couple weeks and not be overwhelmed with material when I come back for a visit. Suddenly, I was nearly 100 posts behind, on a board that generally generates only a few posts a week (usually very informative ones from longtime shareholders, current and former employees). The reason for this surge? Just the very thing that message boards were built for -- a principled debate (in this case, on the effectiveness of DuPont's management), with some deep insights by dedicated (and some new) posters.
DuPont has dropped more than 30% in share price over the last month, so some grousing among its stakeholders should be expected. But this was more than that -- this review took in more than 15 years of an environment at DuPont where management discouraged dynamic thinking by employees, instituted "program of the month" window dressing programs, and made the procedure more important than the end product. The information that has been provided is substantial, and it is not something that a journalist on any level would be able to capture. It came from real people who care about DuPont, have intimate knowledge of it, and have been involved in its operations on various levels for years. How utterly Foolish!
The funny thing is that the discussion did not arise from the stock price drop, per se. Rather, one Fool wrote that he had sent some questions brought up by another post on the Fool board to DuPont Investor Relations a month previously and had received no response. This set off a storm that quickly evolved into something that was altogether revolutionary: the thought that one of the regular Fool posters, a former employee of DuPont, would stage a write-in campaign for the company's board of directors.
The "candidate," whose board name is radioMacgiver, likely has no chance of winning a board seat. The 54% of shares held by institutions and the weight of the shares held by any one of the executives will guarantee that any proposal not approved by the current board of directors will fail. But that's not really the point, is it? The message is the point. And the message is this: "Hey DuPont! You big, beast of a company, you Dow Jones component, you NOW 50 component [well, I wish that were part of the message], you big multinational conglomerate! Remember what made you great! Quit screwing your employees! Quit pandering to the Wise! Your work environment is horrible. It is political, and it suppresses inventiveness, creativity, and risk-taking. And we're watching. And we do not approve. And in this age in which the individual investor has access to a public soapbox, we are now in a position to make a good stink about it."
With one sentence, a "maybe I should run for the board" comment, radioMacgiver mobilized thousands of votes. (Note: You have my 75 votes as well. I would just need to know your name, since writing in "radioMacgiver" probably would not get me too far.) In the process, a group of people -- people who care much more about DuPont than just how it performed on the market yesterday -- began to discuss ways to make the company better, more successful, and more profitable.
I probably would not have followed this up but for yet another message board post: a copy of the letter that DuPont CEO Chad Holliday wrote to DuPont employees about the company's stock price performance. In this letter Holliday laid the blame squarely on the propensity for investors at this time to put money into technology stocks and Internet companies, to the detriment of other types of investments, such as manufacturing-heavy DuPont. In other words, Holliday said, "It's not us, it's them."
Hello? Anybody home? Talk about missing the boat. Of course investors are out piling into technology stocks right now. Because the perception is that the most dynamic leadership of the economy is coming from those very companies. And the most dynamic executives and employees and environments are within those companies. If DuPont wants to be treated like the Amgens (Nasdaq: AMGN) of the business world, DuPont needs to act like them. Reinvent itself constantly. Protect its human capital as if it were gold. And for heaven's sake, when an individual investor asks you a question, ANSWER IT!
Individual investors have never held more power than we do today. We are a larger component of the public markets than at any point in history. More and more we create the buzz around some of the biggest success stories in the market. Don't believe me? Look at the performance of Celera (NYSE: CRA) since it was highlighted by The Motley Fool Rule Breaker Portfolio. DuPont participates in businesses not too far away from Celera and Amgen, but if it cannot even put its best foot forward to the individual investors who are here, WANTING to be its most vocal proponent, it will never be in their leagues. And for a keystone company in the growth of the American economy over the last century, that's a pretty tragic thing for me to have to say.
TMF Otter on the Fool boards