Rather than hold conference calls, it solicits questions from shareholders in its earnings reports and periodically answers "selected inquiries" in 8-K SEC filings with little tolerance for what it considers stupid or obtuse questions. ...
...A few 8-Ks later someone who claimed to have been a securities analyst for 44 years, complained about the response: "If I had been one of the inquirers and read your wise-ass response to me, I would be quite offended. Contemplate cleaning up the inappropriate stand-up comedy act: it ain't funny."
The company shot back: "Truth is that we have never set out to be like the many thousands of other companies out there ... If you don't like what we have written, and certainly some do not, then don't bother to read it. If you are really worked up, please stop thinking about investing in our stock."
Its current 8-K filing mocks the first questioner with a grammar lesson.
So why is this an apparently successful tactic for Expeditors (which has somewhat of a cult like following); and should other companies emulate it?
This kind of reminds me of sports situations in which reporters will ask a question to a coach about a player and he will either provide a nebulous response (i.e. the player suffered a lower back injury), ignore the question completely, etc. Although it may work in a sports arena, when you have to answer to shareholders, the consequences can be completely different. The coach of a team may only lose a marginal amount of public support, whereas a company can find many investors pulling out their money.
ReplyDeleteIt's important to stop and ask explicitly what the purpose of the communication is.
ReplyDeleteOne purpose of communicating with stockholder/analysts is to build up some of that human quality we call "trust." Trust that things are being run well, that they are being run honestly, etc.
Of course, at the same time, a major use of this communication channel by many businesses is to "spin" bad news and "generate buzz" (largely an attempt to create good news out of nothing) in an attempt to positively influence the stock price.
Expeditors are using their communications to disdain the culture of "stock influencing by communication" and so indicate to "the right people" that they can be trusted.
It works because "stock influencing by communication" is so rampant and because there are enough investors around that if you successfully find ones to build a relationship with, you can afford to offend some of the others.
Should you copy this strategy? Only if:
1) Your business fundamentals justify the basic message it sends out "Trust Us, We Know What We're Doing."
2) You can secure enough investment for your company off a relatively smaller pool of investors and analysts who are amenable to this kind of signalling.
3) You have an widespread ethical commitment within your organisation to eschewing the benefits of practices like "stock influencing by communication." Should you slip away from this you could land yourself in a very tight spot indeed.
Sometimes too much becomes too hard to handle, so that’s why we need to not try too hard. I am working in Forex market where I focus on step by step things instead of jumping the gun. I get perfect support with OctaFX broker since they have outstanding educational guide which is seriously helpful and more importantly opens door for me to achieve success, there is also outstanding Southampton Supreme demo contest that I can participate regularly with unlimited prizes.
ReplyDeleteI want to use this miduim to thank Mr Houston for the good work he render to me, is with great joy and enthusiasm that i write on this internet forum because i finally have received my loan from a certain genuine lender whose name is Mr Houston ,his company name is Houston Loan Firm and for the good of you all who are still looking for a loan, this lender is endowed with all the good characteristics of a real loan lender . Judging from the loan they gave to me , their fast and reliable system of lending is not to be compared with any other,this is why i recommend any person seriously looking for a loan to contact him today and i am sure that he is willing to do for you what he has already done for me .
ReplyDeleteContact the lender on this email today: Houstonloanfirm@yahoo.com
Thanks