Corporations fascinate me.
What makes them tick? Is it simply profit...or something deeper? Why do some prosper, while others fall? What's more important, shareholders or management?
Answers vary of course. But what if we put it in a particular context? What happens when a significant company in a booming industry can't escape mediocrity?
Investors get mad, that's what. And eventually, they take action.
Think back for a moment to Enron and Worldcom in the early 2000s. Two seemingly healthy companies, armed with recession-proof balance sheets, solid income, and good cash flow. Nobody outside of management has any clue both firms are deathly ill. And because management never speaks the truth, we never know how bad it is until the companies collapse.
In the aftermath, the ugly specifics make us all cringe. Particularly interesting are the books detailing each crash, among them Broadbandits by Om Malik, The Smartest Guys in the Room by Bethany McLean and Peter Elkind, and Disconnected by Lynne Jeter. All three books emphasize a particular commonality--fierce investor anger.
Now. What if you combine that sort of anger in an industry as volatile and crucial as petroleum? Imagine a massive oil corporation plagued for years by mistakes and mismanagement. The stock has sunk like a stone. Only the company brass is making any money. And shareholders? Well, they simply can't take it anymore.
What should they do?
What would you do?
Like to know more? Please feel free to read a sample here.