David Tepper Blasts Whirlpool Board After Watching Stake Burn Alive…

Dave Tepper didn’t hear no bell…

You know you’re in deep sh*t when a man who famously keeps “brass testicles” on his desk puts you on blast. And yet, the Appaloosa founder… a man who's made billions by knowing exactly when to get loud…  just fired off one of those letters. The target is none other than Whirlpool… a.k.a, the company that makes your Maytag and somehow still finds new ways to destroy shareholder value like it's a core competency. 

Tepper to Whirlpools board be like:

(Source: Giphy) 

Y tho?

For starters, Whirlpool just launched a concurrent $800 million equity raise…  $454.9 million in common stock, $508.1 million in depositary shares, plus a private placement to Guangdong Whirlpool at a discounted $69 a share. The stock cratered 14% on Tuesday, closing at $71.67. And Tepper, sitting on nearly 7% of the company (~3.9 million shares), watched his $282 million position get taken behind the barn in real time.

(Source: CNBC) 

His response, obviously was “I’ll never financially recover from this” “what the actual f*k?”. Obviously, I’m paraphrasing here, but besides watching his stake get guillotined, Tepper points out the equity raise came at a cost of capital north of 10%, while Whirlpool could've tapped public debt markets at a tax-adjusted cost below 5%. Management said they wanted to reduce leverage. They chose the most expensive way imaginable to do it. That's like refinancing your mortgage by selling your car at half price.

And suddenly, it’s zero percent shocking that the stock is down nearly 36% from its 52-week high back in July. "Over the years this management team has destroyed hundreds of millions of dollars of shareholder value. Enough is enough. There can be no more excuses." - Tepper said. Translation: Whirlpool has been asleep at the wheel while management ran the company like it was their personal piggy bank.

(Source: Giphy) 

And yet… he wasn’t done. Tepper also argues that Whirlpool (an American appliance manufacturer) somehow failed to capitalize on Trump-era tariffs designed to benefit... American appliance manufacturers. Which means he’s now pushing the board to explore partnerships or mergers with weakened foreign competitors, essentially saying: you were given a layup and you bricked it, so maybe let someone else run the play. Which, fun fact, also comes from a man notorious for giving NFL coaches the “You’re fired” treatment at a high rate (read: Panthers and Steelers). 

But alas, the bigger picture is that Whirlpool is an iconic American brand portfolio sitting inside a company that can't stop tripping over its own BS. Tepper isn’t asking for a revolution… he’s asking for basic financial competence and a board that acts like it owns the place. The fact that this needs to be said out loud, in a letter, tells you everything about how the Maytag Repair Man has been running things. Meaning, keep your eyes on this story going forward… and place yo bets accordingly. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.