So Dove, a venerable brand of bar soap (owned by Lever Brothers, AKA Unilever, which has an enormous stable of household brands) looks to have trod heavily on its metaphorical private parts in falling for the supposed magic of an internet celebrity “influencer”, a woman who bears a notable resemblance to the Venus of Willendorf and is a malicious racist besides. I swear, I wonder if someone has spiked the coffee urns or the water coolers at whoever is the most currently popular advertising agency with hallucinogenic compounds, or if the advert creators and the approving corporate C-suite executives have all just drunk too deeply of the magical diversity madness. There is a place for edgy – and it’s not with mainstream commodities with a long history of appealing to a wide segment of consumers. On recent examination, I deduce that they are not teaching this in marketing classes lately.
… but fools will learn in no other, as the old saying has it – and ‘dear’ in this sense means ‘expensive’. From all reports concerning the marketing debacle over Bud Light beer, the marketing executive responsible, one Alissa Gordon Heinerscheid is about to learn one of those very dear lessons. When someone sits down to write a history of bad marketing decisions in modern times, this is going to be one of the more spectacular chapters. Amazing that someone so expensively educated in the marketing trade could fall so spectacularly flat-footed. Somewhere back in the mists of time, someone must have imparted the wisdom that alienating the old core market for your product before appealing to the new core market was a bad move. A very bad move.
This paper provides a case study of the acquisition of Twitter by Elon Musk. Our analysis indicates that when negotiating the sale of their company to Musk, Twitter’s leaders chose to disregard the interests of the company’s stakeholders and to focus exclusively on the interests of shareholders and the corporate leaders themselves. In particular, Twitter’s corporate leaders elected to push under the bus the interests of company employees, as well as the mission statements and core values to which Twitter had pledged allegiance for years.
Our analysis supports the view that the stakeholder rhetoric of corporate leaders, including in corporate mission and purpose statements, is mostly for show and is not matched by their actual decisions and conduct (Bebchuk and Tallarita (2020)). Our findings also suggest that corporate leaders selling their company should not be relied upon to safeguard the interests of stakeholders, contrary to the predictions of the implicit promises and team production theories of Coffee (1986), Shleifer-Summers (1988) and Blair-Stout (1999).
There is tension between the interests of owners and those of other “stakeholders”, which is why the interests of non-owner stakeholders require justification as in the linked article. The authors beg the question — they assume stakeholder interests are comparable to owner interests — then find a problem because Musk values his ownership interest in Twitter above the interests of the people he bought out and of the company’s non-owner employees. So what should Musk get in exchange for the $billions he spent? Arguments for more stakeholder rights are arguments for less property rights.
So, by a curious coincidence, my address has been tagged by a long-time and established polling organization, to receive increasingly plaintive pleas for any adult in the household to participate in whatever line of questioning on important matters which they have been asked to research. I guess that someone doing basic research has tagged my residence as representative of a demographic, based on value of home, area of address, ethnic background, income, education, profession … or whatever judgment is used to select respondents for national surveys. One of those mailers even included a $5 bill as token of earnest intent. I pocketed the bill – hey, five bucks that I didn’t have before – and threw the rest of it in the recycle bin.
Time was when I would have been Nancy Nice Person and signed on to give my opinion – hey, I signed up to review movies and books, yea these many years ago, mostly for the freebies which that exercise offered, and once again to give judgment on various surveys that my local grocery store chain offers (in hope of scoring one of those drawings for gift cards) but all that is merely a matter of consumer aesthetics and tastes. This polling enterprise is on a whole ‘nother level. It may touch on the political, and that – like the electrified rail in subway routes – is a thing that I will not venture in these present times. Although I post here, on matters social and political, it is not with my given legal name and residential address firmly attached to said opinions and comment.
…both of us will benefit from increases in the price of Nvidia stock.
Paul Pelosi acquired 20,000 shares of NVDA (via a call option exercise) in June of this year. I’ve been an NVDA shareholder for several years, and sold part of the position at prices considerably more favorable than today’s price of $178/share.
Given that the CHIPS act, which is intended to benefit the US semiconductor industry, is now before Congress, concerns have been raised about whether Paul Pelosi’s purchase might have been influenced by insider information related by his wife.
I note that Nvidia is not thrilled with the bill as currently drafted: it provides benefits for semiconductor manufacturing companies, and Nvidia is not a manufacturer…it is a ‘fabless semiconductor company’, ie, a design, software, and marketing house. The actual manufacturing is done by contract manufacturers, especially Taiwan Semiconductor Manufacturing Company. Some market participants do, however, have hopes that in the final version of the bill the subsides will be expanded to encompass chip-design companies.
The bill would include ‘guardrails’ to prohibit recipients of the subsidies from making investments to expand chip manufacturing capacity in countries of concern, namely China. There may be an exemption for countries-of-concern whether that chips being made are at >28nm notes, ie, a long way from high-end. But one industry analyst said:
The guardrail doesn’t change that most of Intel’s or Texas Instruments’ test and packaging is done in China and will continue to be done in China. What use are new fabs for national security if they have to go to China for test and packaging anyways?
I think there are a couple of issues here. First is the issue of Congresspeople potentially profiting from inside information. The Pelosi buy does look very bad from this standpoint, especially when there are headlines associating Nancy Pelosi’s support for the CHIPS bill with increases in certain stocks–which include NVDA. It’s quite possible that this particular transaction is an innocent one, given that the bill as it stands is not one that Nvidia would have preferred, and also that NVDA price is now low enough, in the context of recent history and the general excellence and positioning of the company, that one could develop an entirely reasonable ‘buy’ case without benefit of any inside information. But the issue of officeholders profiting from inside information is a serious one, and becomes more serious with every further entwinement of government into the details of the economy.
But there is an even more important issue: Do we really want the level of investment in particular industries to be largely controlled by government? It is true that the semiconductor industry is vital to the US economy and to US national defense…but this is true of a lot of other industries as well. How about pharmaceuticals and their precursor materials, for example?…I seem to remember threats from Chinese sources to let American burn in the fire of Covid by withholding pharmaceuticals. What about large transformers, which are vital to the electrical grid and take a long time to manufacture? What about key minerals, many of which are in fact present in the United States but are mostly sourced from elsewhere because of legal and cultural hostility toward mining? What about machine tools?
I have low confidence in the ability of Congress, or of government in general, to determine what industries and what specific segments of those industries are truly vital. There are many complex interconnections which are not easily understood. I remember that during the pandemic, GE Healthcare was asked to produce a large number of ventilators in an accelerated timeframe. It turned out that they were using a very small contractor…a 3D printing shop, IIRC…which had been shut down as ‘nonessential’.
I’d prefer to see legislative solutions which improve the US business climate for manufacturers in general and for ‘thing’ businesses in general, to the crafting of specific ‘solutions’ for specific industries. Legislation should deal with the general case as much as possible, rather than functioning as a Reverse Bill of Attainder. But developing such legislation requires ability to think in abstract terms, and is not a comfortable to politicians who think mainly in terms of interest groups to be used or placated.
Here is the text of the CHIPS bill.
There is also a proposed broader US competitiveness bill, the United States Innovation and Competition Act.
Here’s a WSJ Opinion piece on the CHIPS bill and its proposed galactic expansions.
And here’s Intel CEO Pat Gelsinger and Ford CEO Jim Farley arguing the case for semiconductor subsidization.