MAG Disk (Apr 1994) : StuffToRead / StockHolderMeeting

   
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
%% Commodore Shareholder's Movement - Update                           %%
%% CSM and the CBM Sharholder's Meeting in Nassau                      %%
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

March 2, 1994

Nassau, Bahamas - "We are not a rubber stamp board of directors," 
replied Commodore Chairman Irving Gould to an accusation by computer 
dealer, Jeffrey Moscow.

By this time during the 1993/94 Annual Shareholder Meeting of 
Commodore International, board members had been repeatedly questioned 
on counts of inept management - for having led this NYSE issue to a 
net loss of $356 million for FY93.  Only two years earlier, Commodore 
enjoyed annual net sales in excess of one billion dollars.

Shareholder equity is now about (negative) -10.78 per share and 
Commodore owes over $50 million to banks in 18 different countries.  
The banks are putting the pressure on Commodore to repay, and 
Commodore is trying to avoid legal actions.

The meeting which was four months overdue was held this March 2nd in 
its usual location, the exclusive Lyford Cay Club in Nassau, Bahamas 
where Commodore holds its incorporation.  

There was no repeat of the scene of November, 1991 when a dissenting 
shareholder was physically ejected from the meeting, but passions were 
nonetheless running high.  At one point, Moscow asked General 
Alexander Haig - one of Commodore's five directors - to encourage 
Irving Gould to step down in the same way he had admirably done so 
with a certain US President.  Someone has to take control, insisted 
Moscow; nothing is going to improve under current management, he went 
on.

For about a half-hour, Gould, Moscow and shareholders parried comments 
on Commodore's ailing situation and prospects for recovery.

Commodore is an international company which manufacturers the Amiga - 
the most popular model home computer in Europe and the host to many 
professional video products in the United States - for instance, the 
Video Toaster which has revolutionized the video industry.  Commodore 
also recently introduced CD32, a 32-bit game machine which is becoming 
a hit in Europe.

At the annual meeting, shareholders contended that perpetual mistakes, 
including inadequate supply of products during consecutive Christmas 
seasons, was responsible for the losses, while Commodore blamed the 
effects of soft economic conditions in Europe, their largest market.

But whatever the cause of Commodore's problems, everyone at the 
meeting agreed that something needed to be done - perhaps new 
management or a grass-roots marketing campaign tapping into the 
enthusiasm of the Commodore base of customers as suggested by Michael 
Levin.  Levin described himself as a spokesperson for these customers 
- many of whom have and are still actively becoming shareholders.  The 
only thing being asked of Commodore was leadership.

The lack of confidence in management was demonstrated by the 
shareholder defeat of a proposed amendment to Commodore's articles of 
association.  This amendment would eliminate shareholder checks 
concerning large decisions such as mergers and sales of company 
assets.

Another point raised at the meeting was Commodore's urgent need to 
resolve its debt and recover credibility so that it can become a 
player in the emerging interactive television market.  In this market, 
programs and software will be downloaded by service providers into 
cable-box-like devices sitting on top of peoples' televisions.  
Commodore, the shareholders insist, must become the supplier of the 
boxes or the core technology going into compatible boxes supplied by 
other manufacturers.

"On the surface, every one of our objectives was met for the meeting," 
stated Marc Rifkin, a shareholder attending the meeting with proof of 
the thousands of customers and shareholders backing his cause.  "We 
don't think our warning fell on deaf ears; we now have an open line to 
Irving Gould, and he seems willing to listen.  That is the critical 
first step."

What happens next?  Rifkin replies that either Commodore starts taking 
the steps necessary to survive, or they don't.  The first sign will be 
whether Commodore brings in someone who can deal with the daunting 
financial and marketing challenges, as well as working with the Board 
of Directors.  Previous attempts to find such a turn-around artist 
have ended in debacles, most notably, an ex-Pepsico executive, who 
cost Commodore a $10 million lawsuit, and current president, Medhi Ali 
who led Commodore during its recent decline.


Commodore Shareholder Movement Announcement, March 2, 1994

We were at the shareholder meeting, and we were not alone.  Various 
Amiga dealers whose livelihood depends on Commodore's success were 
also in attendance.  Some spoke along with us while others silently
observed the proceedings.

Our message was clear; things are not rosey.  Consistent and basic 
mistakes led Commodore to where it is, and as anyone can plainly see, 
continuing these mistakes will lead to ruin.  They must not miss their 
one chance to make a comeback through the interactive television 
market.  This relies on partnerships which Commodore has seemed unable 
to form.  The situation is urgent.  Commodore must leverage what 
resources it still has, including the activities of those customers 
who still carry the torch.

Irving Gould met with us after the meeting to discuss what might be 
done.  It seems that Gould is willing to listen and is concerned about 
the message which is reaching the users.  If there is a solution to 
Commodore's situation, it must start from the top.  We hope to offer 
Gould a solution which he will find favorable and will best benefit 
the interests of the Commodore shareholders and customers whom we 
represent.

Keep your letters coming.  Keep them concise and focus on what things 
you might do to help.  Most importantly, spread the word.  The 
assumption is that Commodore and its computers represent a tradition 
worth keeping.  We can not do this alone.  Others must become active 
leaders in the cause.


Commdore Shareholder Movement
P.O. Box 8296
Philadelphia, PA 19101