Phil Rosenthal of the Chicago Tribune writes about how Groupon did not allow business journalists at its annual meeting last week.
Rosenthal writes, “‘Groupon stock is held mostly by large institutions and you could see that by the overwhelming support of each motion sent by proxy and the small attendance of outside stockholders,’ Groupon spokesman Paul Taaffe said Friday by email, confirming the comically low turnout. The media lockout was justified, he said, in that ‘the meeting was intended for stockholders only.’
“To the contrary, with barely enough stockholders in the room to form a line, wouldn’t the absent majority of investors — to say nothing of those who might be contemplating the purchase of shares — benefit from eyewitness reporting of the meeting? Surely there was plenty of room for reporters and reportage.
“But this is an increasingly common mistake companies in the cross hairs of controversy make. Executives under fire, faced with poor revenue trends, potential mergers or some scandal or another think keeping the media out tamps down potential critics. Instead they only mute their own message.
“‘Welcome to the wonderful world of shareholder democracy, which would put any Soviet republic to shame,’ said Peter Henning, a law professor at Detroit’s Wayne State University and a former Securities and Exchange Commission attorney. ‘It sounds wrong (to exclude the media), but it doesn’t violate any rules.'”
Read more here.
