Thursday, November 14, 2013

Further Thoughts on CBS and 60 Minutes' Logan-Gate

I followed with great interest yesterday two excellent threads concerning the recent CBS' <em>Sixty Minutes</em> broadcast about Benghazi, subsequent revelations of shoddy journalism, and insufficient retractions (corrections) thus far:

attytood's DailyKos thread


Mark Sumner's DailyKos thread

I was struck and touched by the calls for boycotting the show and its advertisers and for contacting the show's production team to register one's absolute displeasure.

I could not comment easily yesterday, because I had only my smart phone with which to recommend threads and various replies thereto. But in the process of reading I had some further thoughts about how to influence matters in the best interests of journalism, the American public interest and the truth.

In short, time to think like a capitalist and consider selling your stock in CBS. I don't own any stock (or bonds) in CBS, you say, so how can I sell stock in CBS?

If you're like me, you probably have either a 401-K, an IRA, some investment brokerage account or some combination of the three (I have a combination of the three, but with a very modest amount under $1,000 in the latter).

But how many of you know what stocks and bonds your various retirement accounts invest in? I discovered this morning that my various accounts hold some $13.80 in CBS' Class B stock.

How, you might ask, since CBS' Class B stock (ticker = 'CBS') currently lists for some $60/share. The answer lies in the small slivers of various stocks and bonds owned or controlled by mutual funds and exchange traded funds (ETFs) that you have in your account.

To give you just one example, my Schwab IRA contains 10 shares of an exchange traded fund called "POWERSHARES S&P ETF 500 HIGH BETA PORTFOLIO" (Ticker = 'SPHB'), worth approximately $290.00. I bought this because it is a mid-cap value ETF and Schwab's analysis suggested I could use some mid-cap exposure.

All well and good. But when I took a closer look at SPHB's holdings, I discovered that, as of 11-13-2013 (yesterday), this ETF held 0.94% of its holdings in CBS stock. Taking that 0.94% figure and applying it to the roughly $290 I own means that this one ETF I own holds about $2.73 worth of CBS' stock (0.0094 x $290).

I have other ETFs and mutual funds that own similar small slivers of CBS stock. The result is that, taken together, all those various tiny slivers add up to about $13.80 worth of CBS' stock in my various ETFs and mutual funds.

At this point, I have a couple options. I can contact each ETF and mutual fund to ask or demand that it liquidate its holdings in CBS immediately. Hah! Fat chance that will happen for little ole me with my $2.73 in CBS stock at SPHB. But I can also sell my SPHB (and other such ETFs and mutual funds) and find some other ETFs or mutual funds that do not hold CBS stock.

Oh yeah. And, in keeping with the calls to boycott CBS and its advertisers, I can also contact CBS' corporate organization and specifically its investor relations division to ask, as a part owner of CBS, that it fire and or otherwise discipline any manager, journalist or editor at CBS News involved in the broadcast:

CBS' Corporate Site and Contact Information

A couple additional thoughts: CBS Class B stock (the stuff I own) is called 'non-voting stock' which means that my ETFs and mutual funds don't get to vote at shareholders' meetings on matters concerning CBS' corporate governance. I'm not entirely sure what stock allows one to vote, presumably Class A shares. From all I've been able to discern, I own no slivers of Class A shares. It should go without saying that if you actually own shares of CBS' Class A (or Class B) stock directly, i.e., not through an ETF or mutual fund, you are in the proverbial cat bird's seat and can contact CBS' investor relations and be listened to and heeded far better than little ole me.

To show that this strategy works both ways, I plan to search for ways to add to my holdings of CostCo stock to show my approval of their decision to give their employees the day off for Thanksgiving. As of this writing, my analysis shows that I own some $17.22 of CostCo stock (ticker = 'COST') in various ETFs and mutual funds and I'll be looking to augment those holdings to increase my weighting of CostCo. In fact, I may sell every ETF that holds CBS and use the funds to buy ETF and mutual funds that hold CostCo.

In short, it's time for progressive capitalists (oxymoronic though that may be) to start flexing our muscles where it counts: in the boardrooms and executive suites of America's media giants.

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