Why Aren’t They “Doing Something”?
Some thoughts when the share price stagnates
Why Aren’t They “Doing Something”?
Us investors are a fickle bunch. Many of us claim to be “long-term”—whatever that means. We’ll cite Buffett quotes and perform mental gymnastics to justify holding onto our dogs (I am a pro at this). I know that after one of my stocks has traded sideways or down for what feels like too long, I start wondering why the company isn’t “doing something” about the share price.
You see this a lot on X or in message boards. Often it takes just a few weeks of sideways trading before someone starts calling the CEO useless for not fixing the share price.
Some Background
Most serious investors have taken something formal in finance, or at least have read deeply. But very few have ever run a public company or sat on a board. I sometimes try to imagine what it's like being a CEO fielding investor questions. I imagine it’s a mix of rewarding and exhausting. So many of us measure performance based on short-term price movements:
Stock goes up = good execution.
Stock goes down = bad execution.
But the truth is, there's a lot of noise and randomness in the short term.
They Should Be “Doing Something”
Investors—especially anonymous ones—can be quick to criticize when shares lag. “They should do something!” becomes the rallying cry.
To be fair, that’s part of the job. CEOs don’t help when they declare their company is undervalued regardless of actual valuation. But I do wonder what it’s like to be on the other side of that criticism.
Many CEOs are founders. They wake up every day, fight in the trenches, and bleed for their business. If they happen to open social media or their inbox and find “do something!” thrown at them like a grenade. Could you image how that would shape you and your perspective of investors.
I’ve had a molecular taste of running a business during my time as a General Manager. Rewarding? Sure. But exhausting. Managing people can be draining. There’s a reason I now sit behind a desk, in my pajamas, watching deadlift videos and reading about other people’s companies.
The CEO’s Experience Shapes Their Response
Something else to consider is what the CEO has experienced in their career. Were they part of a company that got swept up in a speculative boom? Did they build something slow and unsexy? Just like your early experiences as an investor shape you, so do theirs.
If the last investors they spoke to were unsophisticated retail holders, they may be wary. If they’ve dealt with pushy brokers constantly demanding capital raises, that shapes their behavior. If they’ve weathered cycles in a public company, they’ve seen it all—the emotion, the panic, the euphoria.
My Perspective
CEOs are smart people. Telling them the share price sucks is like telling your kid, “I told you so,” after they fall. They already know they’re hurt. It’s unhelpful.
If you want to approach a stagnating share price tactfully, here’s how I think about it:
Ask the CEO how they think about their stock’s valuation and market perception. Seeing how they process that is valuable.
Ask what the board thinks about capital allocation—and how that has changed over time.
If you're pushing for a buyback, ask at what valuation they’d consider one.
Ask how much cash the business really needs to operate through the year, and what their “rainy day” threshold is. If there’s excess capital, ask: How should investors think about this over the medium term?
Ask how much time the CEO thinks about the share price or how often they check it—are they fixated on it, or oblivious?
Insider ownership helps. If insiders hold a large stake, I take comfort knowing they likely feel the same frustration with a stagnant share price as I do.
I’ve told CEOs: focus on building the business. If you grow from a small business to a slightly bigger, profitable one—without constant dilution—the share price will usually follow.
There Is Merit to “Do Something”
I don’t want to dismiss investors frustrations with a stagnating stock. CEOs and boards don’t control the share price directly, but they do control how they respond. The market exists to serve you, not instruct you—so take advantage.
Buying shares is the obvious move. But even that is abstract. Intelligent capital allocation doesn't always result in higher prices. Look at the Canadian cannabis market—good decisions can met with apathy.
Think about what many COVID-era SaaS companies learned when the market was ripping on stimmies. Capital discipline went out the window. Poor decisions were rewarded. Same with fracking companies in the shale boom.
Today? You can make all the right moves, and the market might still yawn.
Closing Thoughts
In my style of investing, I find value in being curious and collaborative. I know investors who don’t bother engaging with management at all, so they can be blunt and not worry about how they’re perceived. That’s fine too.
Personally, I try to stay mindful of the future. You never know who you’ll cross paths with down the road. It doesn’t hurt to come across as someone who is respectful and has integrity.
If you're a CEO (or any executive), I’d love to hear about your experience with investors.
If you're an investor, how do you bring this up with management?
Comment below or feel free to send me an email.
Thanks for reading,
Dean