How to buy corporate resources?
Alison Frankel yesterday discussed shareholder activism in an interesting blog post on Thomson Reuters. She references my concerns about the relationship between materiality and corporate political disclosure. For the interested, I’d like to expand on the concept.
What do you mean by “materiality.”
In this context, I’m referring to material facts. That is: a fact that would affect a reasonable shareholder’s financial decision to purchase, hold, or sell a particular stock. Specifically the stock of whatever company is being pressured to disclose additional activity.
Why does materiality matter?
Under long established law, any corporate expenditure or category of expenditures must be disclosed if it is material. Any expenditure means any expenditure: major investments, labor contracts, plant construction costs, distribution network expansions – and political spending.
This is already the law. So when activists demand more corporate disclosure, they’re demanding disclosure of immaterial expenditures. And that means they’re really asking for one of two things. Either (1) information about transactions that are too minor to impact the value of the company, or (2) information that would only affect the investment decisions of an unreasonable shareholder.
Source: Center for Competitive Politics
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The residual effects of the Enron (ENE) debacle are slowly, but surely, beginning to PERMEATE the investment landscape. In many instances it is hard to know whether the secondary problems are critically severe, or just a case of paranoid investors overreacting to ghosts. In 1997, ENE was a rather ordinary gas distribution company trading at $20/share. In the 1998-2000 period, the stock rocketed ...AVG. EQUAL WTD. % CHANGE/POSITION IN 2000................................................
For 2000 activity, see prior newsletter detail at
Note-Return does not include dividends, commissions, or taxes in calculation (current yield = 2.2%)
*New Position added this week
**Old Position closed this week
Dave Anderson, President, Gold Investment Advisors,
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The bill strengthens the definition of “brand” as pertains to beer, by codifying the definition that currently exists in the North Carolina Administrative Code, 4 NCAC 2T.0103, within the statutes of the Beer Franchise Law. The codification of this …
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