Another year another meeting of MicroVision’s stockholders. Another year of practiced patience for someone who uses an investing strategy like mine, long term buy and hold. It is also an exercise in trying to participate in investing in America, while witnessing wealth disparities, class differences, and gatekeepers along one of the few paths that leads into and through middle class America. It isn’t just MicroVision, but MicroVision is a nice microcosm of America entrepreneurship.
For those who aren’t familiar with MicroVision, check my recent post.
In many ways, MicroVision is a classic American startup. There are historic startups that go public, become incredibly profitable, and make it all seem easy. MicroVision is real. It went public over 15 years ago, has yet to become profitable, and definitely hasn’t had it easy – and yet, it may positively disrupt our technological world and positively profit those of use with patience (and amazingly profit one lucky investor who bought at the bottom.) Or not. Nothing is guaranteed. As of 2015, the company may have bit an inflection point (so says management) because products are coming to market and looking good.
So, one avenue to wealth, or at least personal financial health, is to invest in small companies and sell their stock when they’ve become large. The big financial institutions do so, we can too. The difference is that they can take on more risk, buy larger positions, and make more money – and then do it again. Left to market forces, the big investors will rule and make it harder on the smaller investors. That’s why there’s the SEC, to make sure the playing field is flat, or at least not as hilly. If there’s any information, then everyone gets it at the same time. Good.
Of course, it doesn’t work quite that way. The SEC is underfunded and can’t chase down many of the apparent injustices. The markets are driven by computerized actions that require such rapid transactions that institutions are moving their operations closer to critical hubs to reduce their transaction times by nanoseconds; an option individual investors don’t have. News is made public all at once, but institutions do get house calls, something that doesn’t happen for individual investors – which makes showing up at a stockholders meeting more important.
Spelling is important. Ask any grammarian. According to the notice for today’s event it was the Annual Meeting of Shareholders; an event where a bunch of shareholders meet. The typically used acronym, though, is ASM. Most shareholders I know call it an Annual Shareholders’ Meeting, a meeting owned by the shareholders. The ownership of the meeting shifts with an apostrophe. At today’s meeting, the paper said one thing, the slideshow said another. Evidently, there is some confusion.
In expectation, shareholders think they own the company and that the company has to tell them what’s happening. That’s the SEC rule as well. In operation, companies frequently act as if they own the meeting and they just happened to invite the shareholders. That can be taken to the extreme where the directors and managers are behind partitions and ropes, and that all questions are filtered. Class distinction made physical.
MicroVision’s meeting is somewhere in the middle. The directors and officers mingle with the shareholders, but several verbal barriers are kept handy to limit conversations. While they are protecting company secrets and not running it SEC issues, they can also overcorrect by saying so little that is substantive that trust diminishes. It is easy to witness the information filter and gateway as yet another distinction. They tell a great story, but release very little data or proper names.
Corporations are owned by their shareholders. In most US corporations, though, it is one vote per share; so the person with the most shares and the most wealth has the most power. It is possible to have a corporation that is one vote per person, but we’ve gotten into the first habit. Switching to the second style wouldn’t directly shift wealth, but it would shift power – which, through shifting votes on compensation, would shift wealth. Because few individual shareholders have as many votes as institutions, institutions and high-net-worth individuals attain and maintain power.
The consequence is not a call for shifts in corporate structures, except for mimicking shouting into a storm to turn it around. The consequence is for shareholders to work within the current system, where we’re allowed in the door, but must follow circuitous rules to get answers to questions, and to make better decisions about how to improve our financial positions. I think it is worth the effort.
In a recent article, 90.9% of US stocks are held by 10% of Americans. 40% of Americans have negative net worth. There is a strong correlation between investing and wealth; especially lately, because wages are no longer an avenue for improving wealth for most. It pays to invest. With my small holding in MVIS, there is enough potential to carry me from just above that 40% to just under the 10%. Between those two are a region where I can’t pay all my bills for a frugal lifestyle to a region where I have ‘enough’, not luxury in a marketer’s sense, but luxury in that that I could afford to relax, heal, and enjoy.
I came away from the MVIS meeting having experienced the annual frustration of trying to phrase questions such that I can get substantive answers without infringing on insider issues or even just running into the corporate communication immune response. Conversations should be easier, but an us versus them, a suits versus shorts, a power versus powerless divide doesn’t help.
Within writing, the strong declarative statement is preferred. Make it clear and simple. I don’t because the world isn’t clear and simple. That doesn’t, however, mean I don’t participate. My book is called Dream. Invest. Live. because investing isn’t the beginning or the end, but it is one way to get from dreams to living.
After the meeting, and after a fair amount of enthusiasm and commiseration, one friend (or me) put it succinctly; if they succeed and we make lots of money they’ll be considered heroes and all faults absolved. Such is the nature of American entrepreneurship, innovation, and investing.
PS My notes about the specifics of the meeting are available on various discussion boards: (Motley Fool, Investor Village, Silicon Investor). I encourage you to engage there, at least as a way to understand how others viewed the same event. We’re stronger together.