Most Annual General Meetings (AGM) are relatively calm affairs, with management taking a great deal of time to ensure they have more than 50% of the votes to elect the new Board of Directors. In widely held companies, once in a while what the public wants is reflected and there is some questions but the AGM goes in management’s direction. Once in a while there is a change and last December was once in a while. A hedge fund called Engine No 1 led a charge for 3 board seats and won 2 of them. The biggest institutional money managers agreed with the hedge fund in regards to ExxonMobil. The decision made waves of publicity for the hedge fund.
In article by Ben Klayman and Seva Herbst-Bayliss of Reuters, Engine No 1 announced it had bought shares in GM as it makes its transition to battery electric vehicles. According to Refinitiv data, Engine No 1 bought 400,000 shares around $50 a piece. When a fund makes an investment, it speaks to senior management and Engine No 1 said it had constructive and collaborative 2 way conversations or they agree on the strategic direction of GM and their CEO Mary Barra.
GM has announced it would spend $35 billion on electric and self driving vehicles through 2025 and will outline what 2030 will bring forth at investor conferences.
Linking to dividend paying stocks, whether you buy one share or multiple shares, when you buy a company you either like or dislike their strategic directions. Hopefully the more shares you buy the more homework you do in the strategic directions and where you see the company going to ensure it is profitable and can pay a dividend. Doing your homework whether you are a hedge fund or small investor is still the most important part of trying to avoid the first lesson in investing – try not to lose money.
There are more questions than answers, till the next time – to raising questions.