Underneath it all
Palace coup in the underwear empire
Good morning, textile titans. This is your Stock Market Rundown for January 15th, 2024. Thanks for joining me for another week of financial shenanigans. Let’s get things started:
TODAY’S TOP STORY: STITCHING UP A BOARDROOM BATTLE
What underwear are you wearing right now? Wait, it’s not what it sounds like. If you check the tag on your boxer-briefs, you’re probably going to see one of three brands: Hanes, Fruit of the Loom, or Gildan.
Though they’re not a household name, Gildan Activewear does what many used to think was impossible: produce decent-quality basic garments (like t-shirts, socks and tighty-whities) cheaper than Chinese competitors. The trick was owning their own factories in central America—right next door to the endless retail shelves of the USA.
The sock business is usually about as exciting as cleaning your dryer lint trap. But recently, Gildan has had more drama than an episode of Game of Thrones. A few weeks ago, the company’s founder and CEO, Glenn Chamandy, was unceremoniously fired by the board.
Apparently, they turfed Chamandy because he was spending more time on the golf course he’s developing in Barbados than on running the company. (Really, what’s the point of getting rich if you can’t own a golf course in Barbados?) When he did show up for work, he was chasing risky empire-building acquisitions.
When the news of the coup broke, Gildan’s biggest investors hit the roof. Some top shareholders wrote a scathing letter protesting the move, calling it “hasty, ill-conceived and value destructive.” Predictably, the stock price has sagged amidst this ugly spat.
A former Fruit of the Loom exec has been tapped to serve as the new CEO, but Chamandy and his allies haven’t given up—they’re mounting a campaign to depose the entire board. The whole sordid affair sounds more like a soap opera than just another day in the skivvies business.
SO WHAT ELSE IS GOING ON?
The SEC got owned last week when a hacker broke into their Twitter account and posted a phony message announcing approval of Bitcoin ETFs. Crypto prices spiked before the SEC could scramble to put out a statement debunking the fake news. This is what happens when you keep your passwords on a Post-It note.
For the past decade, Apple has been the coolest kid on the block, and Microsoft the geeky nerd in the corner. Plot twist: Microsoft’s stock market value just surpassed Apple’s. It’s all thanks to Microsoft’s investment in AI driving a rebound in its cloud computing business. If Bill Gates still owns any shares, he must be squealing with glee.
2023 was a bad year to be a bank teller. The biggest banks, like Wells Fargo and Citigroup, canned more than 17,000 workers last year as a “cost cutting” exercise. Good luck convincing a customer service chatbot to help you complete a wire transfer.
Electrolux, which manufactures premium-tier household appliances, reported a loss on weak demand and intense price competition. When everybody’s worried about a recession, they’re not springing for the fridge with gullwing crisper doors.
That's all for today, valued colleagues; let’s reconvene tomorrow morning, at the usual time. Yours in capitalism, The Axe
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