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Joined
Nov 14, 2019
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Picked this up off the newswire.


ACTIVIST HOLDINGS


Winnebago Industries (WGO)


Punch Card Capital lifted its holding in the maker of motor homes and recreational vehicles to 2,385,740 shares, including 994,190 purchased from March 10 to March 19 at prices ranging from $19.45 to $36.48. Punch Card responded to Winnebago’s recent press release regarding how it is meeting Covid-19 concerns with a March 24 letter addressed to the board. Punch Card wrote that regardless of the circumstances of this or any other downturn, the company had “failed to heed warnings about leverage” and instead “increased debt by $200 million over the past year,” knowing that “the RV business is very cyclical.” Furthermore, Punch Card is concerned that Winnebago announced that its employees would be “left with two weeks’ pay,” but did not mention whether executives would face similar salary cuts. Punch Card strongly believes Winnebago executives should forgo their pay and that the board should immediately review all corporate spending. Punch Card also urged Winnebago to eliminate its dividend, as such changes are “necessary to maintain a culture of fairness.”
 
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Fortunately, Winnebago's shareholders (stock owners) are very diversified. Punch Card Capital owns a little more than 4% of Winnebago's common stock. I think the largest shareholder is just over 6%. This means it is unlikely that any one shareholder has much actual leverage.

That said, I think PCC's comments reflect a conservative approach that Winnebago should consider carefully in these difficult times. In any industry that depends on large numbers of skilled workers, not having upper management share the pain in hard times leaves a lasting impression on the workforce. The perception of "fairness" will go a long way toward workforce loyalty when it is needed during the recovery period...and beyond.

TJ
 
Joined
Dec 25, 2019
Messages
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Unfortunately in my 30+ years in the corporate world I have rarely seen this perception of "fairness". The corporate bigwigs seem to to be completely isolated from the hardships of employees. To them only the dollar rules. Sad to say this. I hope t5hey will take note.
 
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