#agms — Public Fediverse posts

A Second Adjournment Vibe Check on QQQ

The Invesco QQQ shareholder meeting has been adjourned for a second time, because the company once again failed to muster the votes they need for their UIT-ETF conversion scheme.

Invesco came awfully close on this round, with “over 50% of shares” voting with management and for the conversion. That leaves them with less than one point to gain by December 19th, when the shareholder meeting is expected to resume. The plan is to badger non-voting shareholders until they reach or cross the 51% threshold. The company said as much on a flyer published after the first adjournment: “Mailings and calls will STOP once you vote!” Or, the beatings will continue until morale improves.

Invesco is probably going to get its way, either by December 19th or soon thereafter.* But their strategy creates some vulnerabilities, which I think are best captured in headlines like this one, published on Morningstar today: “Why has Invesco’s QQQ called me two dozen times in the past few weeks? Is it a scam?” No, it’s not a scam, but I’ve seen versions of the same question asked in a number of different places. People are asking if this is a scam because a) they are unused to being contacted by companies and funds where they hold shares, which is a problem I’ll leave for another day; and b) Invesco’s behavior right now feels scammy, a little too desperate and sweaty.

I appreciate how hard it is to engage shareholders. (I was once the only shareholder to show up for a fund’s annual meeting.) “It’s a lot like herding cats,” says one equity analyst quoted in the Morningstar piece, but tired metaphors will only get us so far. The incessant calling and mailing and emailing, the repetition of the same three or four talking points, the exclamations, all caps, and multi-color fonts on the badly proofread flyers — none of it is compelling, none of it inspires trust. A fund holding hundreds of billions in assets, with both major institutional investors and millions of retail investors, shouldn’t feel like a pyramid scheme run out of a low-budget call center.

The Invesco QQQ campaign has been annoying, tawdry, and spammy. I can anticipate the argument that in this attention economy a noisy, pounding, unrelenting beat is the only way to attract and engage shareholders; and I would concede the point but add that maybe the time to start attracting, engaging, and including shareholders in governance questions was long before the company so desperately needed their votes.

Put out a bowl of milk every once in a while and you won’t find yourself herding the cats. They will be meowing at your doorstep.

Tired metaphors aside, it’s going to be much harder to engage shareholders with last minute campaigns than with long-term, sustained programs in which they see themselves included and actually have a voice. Suddenly popping up on everyone’s phone and flooding people’s inboxes is only going to undermine trust and reflect poorly on the company.

I realize that’s not an argument for or against the UIT-ETF conversion. (I’ve laid out my arguments on that issue in a previous post.) This is more a vibe, and it’s really not a good one: it makes me wonder why they’ve resorted to these tactics, and what’s really going on with this proposal.

And just for the record, I’m sticking with the “no” vote I cast just before the first adjournment.

* Update 19 Dec 25: The deed is done. Invesco QQQ will start trading as an ETF as early as Monday 22 Dec.

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