Writing letters to boards – an effective catalyst?

Many public companies are undervalued, but their stocks will not re-rate until management implements meaningful change.

Recently, the old tradition of making your voice heard has started to re-emerge.

Shareholders are the ultimate owners of companies, yet directors nowadays all too often own only a de minimis amount of equity. Investors are rediscovering how important engagement ownership is, and a growing number are writing letters to boards. These letters combine justified criticism with constructive suggestions.

Amazingly, this approach appears to be working.

Is it worth galvanising such letter writing? If so, what past examples can investors learn from?

Owners writing letters – then and now

Making yourself heard as a shareholder is not new. In fact, it's the very bedrock of capitalism to have owners in charge.

Typically, it involved just a single shareholder with a very meaningful stake writing to a board and then publishing the letter through mainstream media.

One of the masters of the craft was Dan Loeb of Third Point in New York. In 2005, Bloomberg magazine dedicated a feature article to his reputation as a "hedge fund rabblerouser" with a knack for writing memorable letters to boards:

"Loeb's pungent prose and hard numbers have earned him a readership among analysts and money managers, says Steven Chercover, a senior analyst at D.A. Davidson & Co. in Portland, Oregon. Each tirade gets e-mailed among financial professionals, who savor Loeb's taunts and research. 'Loeb is the Hunter S. Thompson of activist letter writing,' Chercover says, a reference to the writer who unleashed the concept of freewheeling, gonzo journalism in books such as Fear and Loathing in Las Vegas."

(The hardcopy magazine article is now only available through Scribd, or email me for a copy.)

More recently, a well-known podcaster and Substack author has popularised a different form of letter writing.

Andrew Walker, Head of Research at Rangeley Capital and author of Yet Another Value Blog, called on readers and podcast listeners to write to four companies where he identified both serious problems and opportunities for improvement.

His missives included:

• "An open letter to the $SAGE board: it IS about the money" (May 2025)
• "An open letter to the Keros board $KROS" (May 2025)
• "An open letter to the $ARVN board" (August 2025)
• "An open letter to the Golden Entertainment board $GDEN" (November 2025)

A fund manager who followed these cases told me: "This form of 'engaged ownership' has proven tremendously effective. If one letter is sent to a board, that may be cast aside. If a dozen or even dozens of letters get delivered, that goes to general counsel and is formally noted. These letters would form part of the discovery in legal proceedings. They could play into personal liability of board members. A larger number of letters are a governance crisis!"

Likewise, when speaking to a public company director, he told me: "If ONE such letter was sent to my board, I would be sh*tting myself."

I caught up with Andrew in New York and asked about his experiences and observations:

"Given minimal stock ownership, board members and executives often have incentives wildly opposed from shareholders. While they're getting rich on huge bonuses and excessive board fees, shareholders suffer. Communicating with boards and holding their feet to the fire is often the only way to get a positive outcome for shareholders."

Undervalued-Shares.com Lifetime Members will know that I have already accumulated some experience in this area.

My own "letter writing" in 2026

In January 2026, I published a research report on Palace Capital (ISIN GB00BF5SGF06, LSE:PCA), a London-listed real estate investment trust with a portfolio of office, residential, industrial, and leisure assets across secondary and tertiary UK locations.

As I saw it, the chairman was robbing shareholders blind. He was charging GBP 217,000 to chair a tiny company with a greatly diminished portfolio. By comparison, the entire five-person board had cost shareholders just GBP 195,000 in 2021. He had also undertaken manoeuvres that potentially increased his remuneration to as much as GBP 600,000 while deliberately obscuring the true picture.

A larger shareholder had already requisitioned an EGM to remove him, but it remained uncertain whether other (large) shareholders would support the effort.

My report set out in detail what the problems were and how much value would be unlocked if they were addressed.

Two weeks later, the entire board resigned.

My report was not a letter in the traditional sense, but it travelled through shareholder circles as though it were an open letter.

Spelling out the issues publicly and in detail helped bring about the desired outcome.

One could dismiss Palace Capital as a tiny outlier. The company had a market cap of only GBP 40m (USD 50m).

However, shortly afterwards I spoke out in a larger and more consequential case.

In April 2026, Lifetime Members received a research report on Brockhaus Technologies (ISIN DE000A2GSU42, DE:BKHT), a German-listed private equity holding company with a market cap of EUR 180m.

The company had raised around EUR 250m from investors through its 2020 IPO. At the time of writing, outside shareholders had collectively lost EUR 34m, while management and insiders had collectively gained EUR 65m.

Following the sale of its largest holding, Brockhaus was due to receive EUR 240m in cash. Management appeared intent on finding ways to reinvest the proceeds, thereby preserving the gravy train and potentially extracting additional value from shareholders.

My report argued that the proceeds should be returned directly to shareholders. Several large shareholders were already openly agitating for change.

Two months later, management agreed to return EUR 180m to shareholders. It was not the full amount that should arguably be distributed, but it represented a major step in the right direction.

Again, my "letter" took the form of a research report that found its way into the inboxes of shareholders and stakeholders. It was certainly not the sole reason for the outcome, but it played a role. Few things are as powerful as spelling out facts in black and white.

These projects arrived on my desk largely by chance through my network.

They left me wondering: is there value waiting to be created by being an outspoken investor who pens missives to boards and CEOs?

Why aren't funds more active?

I ask this question particularly in the context of the UK market.

The London market is full of companies that combine low valuations with severe deficiencies in:

• capital allocation
• governance
• investor communication
• removal of structural blockers
• corporate actions
• executive compensation.

It continues to amaze me how many fund managers with meaningful stakes fail to address these issues effectively.

Take Palace Capital. Its shareholder register included many of the best-known names in British fund management, including:

• Winton Capital
• Harwood Capital
• Premier Miton
• Hargreaves Lansdown
• Janus Henderson
• Interactive Brokers
• Shore Capital
• Barclays Stockbrokers
• AJ Bell Securities
• European Clearing
• Cowen International
• Shard Capital
• CQS UK
• BlackRock Investment Management
• James Sharp & Co, Commerzbank
• Castellain Capital
• Societe General Bank & Trust
• Halifax Share Dealing
• Barclays Capital Securities
• Vanguard Group
• Cenkos CI
• Chelverton Asset Management
• Redmayne Bentley

Some of these firms will only act as nominees for investors, so they are not directly responsible for representing these shares in votes. Others owned substantial positions as part of their looking after client funds. Winton held 9.5%, Harwood 6%, and Premier Miton 6%.

Given the obvious and grave misdeeds of the chairman of Palace Capital, two proxy advisors had already come out with warnings. When that chairman's position came up for re-nomination, ISS pointed to serious governance concerns, and Glass, Lewis & Co. recommended voting 'No'.

Amazingly, the voting result at that AGM was just 5% of shareholders voting 'No' to the re-nomination, 5% voting to abstain, and 90% supporting the re-nomination.

One could make the cynical comment that the chairman would have been stupid had he not robbed shareholders blind. If large shareholders don't act even when the incriminating evidence is on the table and proxy advisors are pointing towards it, then what exactly should he have feared?

Clearly, the system is broken in some respect. It's not just shareholders that are affected, but also employees and the integrity of a country's capital market.

If investment funds that hold large stakes in companies cannot necessarily be relied upon to address such issues, then who will?

It's a serious question, given the state of affairs in the UK market.

XP Factory – a case study in shareholders (quietly) driving change

In fairness, I have picked two rather extreme examples to highlight a broader issue.

At other companies, the influence of shareholders – including funds with meaningful stakes – has already made a positive difference.

I made this entire subject the focus of my own presentation at the Weird Shit Investing conference in London and New York. The positive example I highlighted was XP Factory (ISIN GB00BDB79J29, UK:XPF), a company that embodies so much of what is wrong with the London market, but also how much value can be created if those issues were addressed.

XP Factory.

XP Factory is quite typical of the sort of company you currently find on AIM:

• Market cap of just GBP 32m.
• Share price down majorly over the past ten years.
• Profitability is actually quite decent, with expected 2026 EBITDA of GBP 5.5m.
• Debt is low, with net debt of just GBP 5.7m.

Trading at a 2026 EV/EBITDA multiple of 6.5x, the stock is cheap, but not quite cheap enough to get excited. Why should it trade at a higher valuation than hundreds of other AIM-listed stocks?

Yet since February 2026, the share price has risen by 80%. It moved from 11 pence to 20 pence.

XP Factory.

What happened?

In what must be one of the worst-kept secrets in the market, a buyer for the entire company had emerged last year. They wanted to launch a takeover offer at 25 pence per share, following years of the stock trading sideways in a range of 10-20 pence. Reportedly, the board was inclined to accept.

In effect, this would have been akin to the board throwing shareholders to the lions by selling the company at the worst possible time and for a very low price.

A number of (ultra) high-net-worth individuals and at least one investment fund with a meaningful stake – the highly successful TM Oberon UK Smaller Companies Fund, which according to Citywire was the leading UK Smaller Companies Fund over the two years to April 2026 – put their foot down. First, they stopped any potential takeover bid in its tracks. Then they pushed through overdue change. The chairman was removed and replaced with a new one. Undervalued-Shares.com Lifetime Members were invested in another company that he leads. They made 145% in 19 months after I published a research report about it.

No letter-writing campaign was necessary in the case of XP Factory. The system of shareholder governance worked and brought about much-needed change. The only criticism is probably that it should have happened much earlier.

That said, it's noteworthy how some of the changes at XP Factory appear to have been driven by wealthy private investors rather than solely by institutional fund managers. Given the rise of private wealth and family offices, alongside the relative decline in valuations on the London Stock Exchange, I dare to predict that we will see more examples of this.

And just as I was putting the finishing touches to this article, German media and finance entrepreneur (and billionaire) Bernd Foertsch published a letter he had sent to BioNtech (ISIN US09075V1026, DE:22UA). Having tried to resolve the issues raised in the letter through a quiet dialogue with the company, he now believes that taking his concerns public is the only way forward.

A new era of active ownership and letter writing may be upon us.

Where to strike next – if at all?

It all begs the question: which other companies – in the UK or elsewhere – should see shareholders stepping up and speaking out?

Which company (or companies) should next receive a letter from an engaged owner? Are there any cases where governance failures are so outrageous that shareholders, in their role as active owners, should stage an open revolt?

Are there other case studies from the past that are worth learning from?

What are the risks involved, and how can activists avoid becoming entangled in legal issues?

Is this even worth pursuing actively, or is it best left to existing players such as fund managers?

I put the question out there for discussion.

In principle, I'd love to set positive (and badly needed) examples that inspire others.

Feedback of any kind is greatly appreciated. 

Write me a letter!

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