U.S. media ignore Internet-led coup of British company

TheDeal.com executive editor Yvette Kantrow noted that retail investors have used the Internet to lead what she believes is the first management overthrow of a company, yet no American media have covered the story despite their fascination with shareholder rights.

Kantrow wrote, “Indeed, rumors that Hashemi was planning a management buyout became so plentiful on the Internet that Hashemi in September explicitly denied them and blamed them for causing volatility in the company’s shares and scaring away potential franchisees. In a letter to shareholders, he wrote:

“‘Despite repeated denials by the company, speculation has continued that management plans a buyout of the company. Let me make this as clear as I can: There was no management buyout plan and there is no management buyout plan.’

“One month later, with Bartlett and Breach poised to call an emergency general meeting, Hashemi stepped down, clearing the way for the pair to be named chairman and chief executive, respectively, in what London-based Breakingviews.com said was ‘the first time retail investors have successfully ganged up to claim a high-profile executive scalp.’ Surprisingly, not a word about the Coffee Republic affair has been written in the U.S., despite its media’s obsession with shareholder rights.

“Breakingviews sees the Coffee Republic affair as a warning to other small companies. ‘The Internet has put much more power in the hands of retail investors,’ it says. ‘It also raises questions about how investors use that power. Perhaps its [sic] time regulators took a closer interest in what goes on in Internet chatrooms too.'”

Read more here.