This week’s episode of Let’s Talk Markets was a bit of a departure from our regularly scheduled programming. Without a guest on tap, we decided to let the cameras roll backstage. Co-hosts Dave Lauer and Pink are joined by members of the production team—The Real DMT and Urvin Ed—for a freewheeling discussion on markets, monetary policy, and pirate vocabulary.
We covered a lot of ground.
But perhaps the most important topic of discussion was shareholder voting. As an investor in a publicly traded company, you have shareholder votes. You have the right to exercise these votes every time the company holds a referendum on something like the issuance of a new security, a big corporate acquisition, or the election for a new Board of Directors.
Did you know that you can actually sell your votes on something called the Shareholder Vote Exchange?
[And before you ask, “how is this even legal?”…the answer is that it’s not technically illegal, so…yeah.]
The Exchange’s website even has a friendly little calculator to tell you how much your votes are worth. So, for instance, it says that I can sell my 100 shareholder votes at Disney for anywhere between $9 and $182 over the course of a year. If you hit the upside, that’s a bottle of water and a Finding Nemo PopSocket inside the theme park..
We mention Disney for a reason. The entertainment behemoth is at the center of the single largest proposed transaction in Shareholder Vote Exchange’s 2-year history. A hedge fund has offered $100,000 to purchase 500,000 Disney retail shareholder votes. The bid will only succeed if all 500,000 votes are accumulated and, at the time of writing, the numbers don’t add up.
But it is a curious transaction that converges with very public efforts to unseat Disney CEO Bob Iger. Nelson Peltz of Trian Fund Management is working alongside former Disney executive Ike Perlmutter and Blackwells Capital to shuffle Disney's leadership in the upcoming April 3rd Board of Directors election.
But they need to buy your votes to do it. That’s not usually the kind of campaign slogan you put on a bumper sticker. If you check their website, they’re going with the tagline—Restore the Magic…which is better.
Disney, on the other hand, wants retail shareholders to exercise their vote. The company is unique among American brands, as more than one-third of its 1.8 billion shares are publicly owned. That amounts to some meaningful voting power.
Don’t believe us?
Just ask Donald Duck’s Uncle Ludwig, who explains why it’s so important to exercise your vote. (For real, though.)
Of course, it’s easy to slip down the rabbit hole here. If it’s possible to use overwhelming wealth to purchase retail shareholder votes, is there any way to prevent owners from doing this in their own companies? And if not, how might this distort our understanding of what constitutes a publicly traded company?
We can’t answer these questions just yet. The practice is fairly new. But according to the Shareholder Voter Exchange website, more than 200,000 votes had already been bought and sold as of December of 2023.
We can’t possibly know how this has already impacted voting at publicly traded companies.
But we do know this—you have another option. Instead of selling your shareholder votes, you can actually exercise them. That’s what we’re working on at Urvin these days.
No, we won’t pay you for your shareholder votes…but we also won’t threaten a hostile takeover of your favorite companies.
Instead, we want to create a direct channel between you and those companies. The Shareholder Voter Exchange makes a good point. Retail shareholder votes generally go unused. We don’t exercise our right to use them. We are a scattering of disconnected investors floating along on separate breezes.
We see our individual voices as too small to bother using. Why vote? What’s the difference?
We’re building Shareholder Communities at Urvin, so that our voices actually can make a difference. Believe it or not, a lot of companies actually want to know how their shareholders feel. You can’t put a price on that kind of marketing data.
If we sell our voices, we’ll never get them back. If we join these voices together, we’ll be louder than a Disney Goddamn Holiday Musical Spectacular On Ice.
Dave Lauer is a co-founder and CEO of Urvin Finance, where he leads the team in building Urvin Terminal. Prior to founding Urvin Finance, Dave spent over a decade advocating for financial market reform after quitting his job as a high-frequency-trader.