Saturday, March 27, 2004

I Call Bullshit on Bill Dreher, Investment Ass

Stopping by The Obscure Store I found this posted.

“Wall street doesn’t like it when companies are too good to workers.”  The link associated with that blurb points to a Wall Street Journal article titled “Costco’s Dilemma: Be Kind To Its Workers, or Wall Street?”

Two quotes from the WSJ article caught my eye.

“From the perspective of investors, Costco’s benefits are overly generous,” says Bill Dreher, retailing analyst with Deutsche Bank Securities Inc. “Public companies need to care for shareholders first. Costco runs its business like it is a private company.”

Uhm, hello Bill Dreher, Costco is a private company.  The “public” you’re so concerned about can opt out and “punish” Costco for running their business the way they currently run it, by taking their dollars out of the company.  That’s the way the game works.

Costco’s president and chief executive understands the reality of this private business.

“The last thing I want people to believe is that I don’t care about the shareholder,” says Jim Sinegal, Costco’s president and chief executive since 1993, who owns about 3.2 million Costco shares valued at $118 million based on yesterday’s price of $36.96, up 52 cents, in 4 p.m. Nasdaq Stock Market trading. “But I happen to believe that in order to reward the shareholder in the long term, you have to please your customers and workers.”

You tell em, Jim.

Posted by John Venlet on 03/27 at 08:14 AM
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