The New York Times DealBook, December 15, 2021, article: "Exclusive: Crowdsourcing shareholder activism" [New venture to support meme activism campaigns]

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New venture to support meme activism campaigns

Source: The New York Times, DealBook, December 15, 2021, article

DEALBOOK NEWSLETTER

By Andrew Ross Sorkin, Jason Karaian, Sarah Kessler, Stephen Gandel, Lauren Hirsch and Ephrat Livni

Dec. 15, 2021

Exclusive: Crowdsourcing shareholder activism

Today, a service is launching that will allow individuals to use their brokerage accounts to shake up public companies, just like hedge funds and other big activist investors do. Iconik, a new app, offers commission-free trading, like Robinhood and others, while also encouraging users to team up and force companies to make changes by collectively voting their shares.

Institutional investors have long held the most sway on matters like executive pay, director nominations and environmental practices because of the size of their holdings. Using Iconik, small shareholders could create their own campaigns and get users to pledge their votes, which would be cast collectively at a company’s shareholder meeting, potentially giving a group the same clout as a large institution. It’s crowdsourcing, but for shareholder activism.

Alex Thaler, Iconik’s C.E.O., got the idea during the meme stock rally. “Most investors don’t put much value in their voting rights, or even know they exist,” he told DealBook. The meme stock rally, he said, showed that with social media tools, collective action in the stock market is much easier today.

The app is launching with two active campaigns. One is sponsored by the group Sleeping Giants, which is calling shareholders to force Facebook to shut down hate speech on its platform, and the second is aimed at JPMorgan Chase, which environmental activists want to stop lending to fossil-fuel companies.

There is a potential downside: Iconik encourages investors to buy individual stocks, while financial advisers generally recommend diversified index funds. But Frank Partnoy, a Berkeley Law professor who studies shareholder governance and is an investor in Iconik, said that individual investors have given up their voice in corporate America in the name of diversification. “What GameStop and AMC showed us is that when individual investors decide to act together they can have a significant influence on the market,” he told DealBook.

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