in Dendreon, printed up hard copies of his detailed critique, packaged them in binders, and sent them via FedEx to all of those top investment houses.
Then he waited.
“Surprisingly, I got a couple calls back,” Loncar says. “I talked on the phone to people I never dreamed I’d talk to. They were investors I look up to and idolize. A few of them said they agreed with almost everything I wrote.” When pressed for specifics, he wouldn’t name these investors, but did say he spoke to representatives of three of the top 12 major holders in Dendreon. None of them said they were willing to go public in their support for Loncar’s proposal.
The feedback he got was something like this, Loncar says: “We don’t know who you are, you’re a small investor, we’re a little uneasy supporting you.”
Nonetheless, the comments from the big guys were “a morale booster, and vindication that I was on the right track.”
That morale booster is what led to the open letter to shareholders, which Loncar posted on Twitter and InvestorVillage.com. Almost immediately, he started getting attaboy comments posted publicly, and sent to his e-mail privately.
Loncar says he had a lawyer friend review his critique just to make sure there was nothing illegal about it, but he says he’s got no real legal strategic help in getting what he’s asking for. He isn’t trying to oust any incumbent members of the board or replace them with directors of his liking, as the big guys like Icahn tend to do. As a little guy, Loncar says, making a list of demands like that would be unrealistic, and would essentially get his proposal tossed in the garbage immediately.
Instead, Loncar says he’ll be happy if Dendreon expands its board by one, maybe two members. The new representative(s) should be looking out for the ranks of small shareholders who want the company to succeed, Loncar says. While Dendreon’s board is currently composed of people with “impressive credentials” in healthcare and biotech, he thinks it could benefit from a more general business perspective. It’s been done before, as Loncar says, at the American Cancer Society, which seeks to strike a balance with directors from the medical field, as well as other parts of business and society at large.
It will be fascinating to see if this turns out to be something that grows into a real shareholder movement, as Loncar says he hopes it will, or nothing more than an Internet squall. Companies are often hostile to any attempt to rattle their boardrooms, and the law makes it very tough even for guys as rich, tough, and experienced as Carl Icahn to have an impact. Can a true little guy in the middle of America actually affect change at a prominent biotech company?
Loncar insists that he’s sincere, and wants to make Dendreon succeed. He certainly has shown he knows how to use the tools of the Internet to get his message across, and to get the attention of the powers that be at Dendreon. I’m very curious to see how this turns out.
Loncar, naturally, was feeling pretty optimistic about his chances after getting all the support he did from his fellow shareholders today.
“It no longer takes a Carl Icahn to bring about change in companies. That’s what I’m doing now.”
