Thursday 9 September 2021 8:34 am

Bottom-up ESG: New platform wants to give retail investor army voting power for £1

Tulipshare is targeting the next generation of shareholders by tapping into their booming interest in retail investment and demand for a corporate ESG overhaul.

The new UK-based activist investment platform wants to enable individuals to “vote with their money” for change from the inside at Amazon, Coca-Cola and Apple by investing as little as £1.

And two months after trading began on its platform, Tulipshare has already reached the threshold needed to submit a shareholder proposal at Apple.

New users of the investing platform have invested a total of $32,000 in Apple in support of Tulipshare’s ethical campaign for right-to-repair so that people can repair their devices without jeopardising their customer guarantee.

Having surpassed the $25,000 threshold, Tulipshare’s community of investors now owns enough shares to engage with Apple’s Investor Relations team, and once shares have been held for a year, submit an activist shareholder proposal to be voted on at the tech giant’s next AGM.

How it works

Currently, investors can buy shares in just these three companies trading on the US stock exchange, chosen for the anticipated appetite for the platform’s ESG campaigns for each.

But with these, the platform plans to set a precedent for retail investors coming together to effect green change in many more businesses.

“It’s funny because I incorporated the business in September 2020. And then six months later, it all happened,” founder and CEO Antoine Argouges tells City A.M.

He is of course talking about the army of retail investors that swarmed to Reddit’s WallStreetBets forum to battle short-selling hedge funds and catapult shares in GameStop and other “meme stocks” into the sky.

“Aside from the whole GameStop saga being a bit of a ‘f*** you’ to hedge funds, what it did show is that 15 million people in a day could click and participate in a company financially,” Argouges says.

Buying a £1 share in a company sounds negligible as it would conventionally get you nowhere near the board, granting theoretical voting rights but standing miles off the 4 per cent ownership necessary for UK shareholders to put forward a voting resolution.

But when an investor uses Tulipshare to invest in one of the three companies, they forfeit their shareholder rights so that the platform can aggregate them.

Once Tulipshare has accumulated the critical mass of $25,000 equity needed in the US companies, it then tables a voting resolution on behalf of all the individual investors.

“If you have one share in Amazon, you’re entitled to write to the board and ask for an answer to any question – but it doesn’t mean they’ll answer,” Argouges says.

“But if it’s you plus 10,000 people who collectively own 100,000 shares, it’s no longer in the power of the company because the resolution you submit will be voted on by all the other shareholders.

“This is ultimately the only way for us to get our campaigns to actually become binding for the companies and the executive,” he adds.

That resolution will be for one of the three ethical campaigns: The above call for right-to-repair at Apple; fair and safe working conditions for Amazon warehouse workers; and all plastic bottles produced by drinks giant Coca-Cola being made from 100 per cent recycled materials.

It might not be an immediate hit on Reddit with the booming get-rich-quick retail investor scene, but founder Argouges wants to use Tulipshare to encourage retail investors to “rethink” their long-term investment strategies.

“For far too long if you go into any general meeting when ESG resolutions are voted on, the company’s usual answer has been ‘the shareholders don’t want it to happen,'” Argouges says.

“So now we want to change this narrative by giving the exec team an opportunity to rely on a group of shareholders that want to drive significant and positive change.”

Argouges expects the campaigns to go viral on social media, as nascent investors are given a chance to express their ethical demands for big corporations and “put their money where their mouth is” for the first time.

The platform, which launched this week, is still in its early days with $1m raised in pre-seed funding, but it’s been regulated by the FCA since April and is looking to expand to the US market – the main area of focus for the company.

“The UK is much more restrictive regarding minority interest and the ability to submit shareholder resolutions on a country-wide level, so we chose to focus on these three well-known companies because their US trading means there is a greater chance of success,” Argouges says.

“When people realise that buying Coca-Cola shares means buying an opportunity to ban plastic in our oceans, word will spread.

“We’ll then use that success in our first campaigns to create a cascade of success.”