Wednesday, January 23, 2008


Glenn Greenberg, the chief of Chieftain Capital, is ticked off with Comcast, and with its CEO Brian Roberts, for an obvious reason: Comcast stock is down 40% over the past year.

Roberts' defenders, including the folks at the Motley Fool website, will tell you that the situation isn't of Roberts' making, that there are industry-wide difficulties with cable. The high cost of providing it, to start with. The increasing appeal of satellite TV.

Still, there are obvious answers to that. Is Comcast stock losing value because the company is staying in a dying industry. That's hardly a reason for confidence in its management! Couldn't Roberts' team diversify the company's assets and products?

Perhaps they don't have any very pressing incentive? The company has a dual-share structure, so that Brian Roberts and the rest of the Roberts family (Brian's father is the company founder) have 33% of its voting power, while owning only 1% of the shares.

The story in yesterday's WSJ suggested there's not a lot that Greenberg can do about the situation (except, of course, to sell his stock). He'd need allies to do more, and they haven't shown themselves yet.

Also: didn't he know about the dual share structure when he bought in? If not, why not?

For the rest of us, the question is whether such a structure, with its management-entrenching superstock, is a good or bad policy idea. Is it something the SEC ought to worry about? or just the natural result of freedom of contract? does it have a causal impact on performance?

I've been piling up a lot of questions, and offering no answers. Let's make a few simple declarative sentences to end upon.

Early this morning (before I wrote this) someone from Malaysia reached this site by running a search for the name "Glenn Greenberg." I'm always delighted at the thought of an international audience, and I hope that particular visitor found my biographical observation on Mr. Greenberg, yesterday's entry, of some value.

That's going to have to suffice as an ending!

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