The C-case of the WIPHOLD series describes a tumultuous time for the company from 1998 to 2002 as its fortunes rose and fell in line with those of South Africa’s black chips. Responding to market signals, and in an attempt to eliminate the discount at which its shares traded on the stock market and to create value for shareholders, WIPHOLD decided to become an operational financial services company in 1999. It then embarked on a three-year plan to make this a reality. This decision would place it in direct competition with its institutional investors who were big financial services companies. In addition, lacking capacity, WIPHOLD poached people from some of these same institutions. As 2002 drew to a close, WIPHOLD reviewed its challenges. How could it deal with increasingly fractious institutional shareholders who now owned the majority of WIPHOLD’s shares–the women’s shareholding having been greatly diluted after the private placement. Although the institutions disagreed with its strategy of moving into operations, the company believed it was the right way to go. But the flagship of that strategy, its financial services company WIPcapital, had turned in a disappointing early performance. And to crown it all, WIPHOLD’s shares continued to trade at a significant discount to its net asset value. What could they do?
