Wiphold (C): Managing The 2002 Crisis (Abridged) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

IMD-1-0232 © 2005
Leleux, Benoit F.; Ogunsulire, Mope; El-Agamy; Hischam

Responding to market signals; and in an attempt to get rid of the discount at which its shares traded on the stock market and to create great value for stockholders; WIPHOLD decided to become an operational financial services firm in 1999. It then embarked on a three-year plan to make this a reality. This conclusion would place it in direct opposition with its institutional investors who were big financial services firms. From some of these same associations; lacking ability; WIPHOLD poached individuals in addition.

As 2002 drew to a close; WIPHOLD. How could it deal with increasingly fractious institutional shareholders who now owned the bulk of WIPHOLD's shares --the girls's shareholding having been considerably diluted after the private placement. Although the associations disagreed with its strategy of moving into operations; the business believed it was the right way to go. But the flagship of that strategy; its financial services business WIPcapital; had turned in a disappointing early functionality. And to crown it all; WIPHOLD's shares continued to trade at a substantial discount to its net asset value. What could they do? This case series was the 2005 EFMD award winner in the category “Managerial Issues in Transitory Markets”.

Wiphold C Managing The 2002 Crisis Abridged Case Solution

Subjects: Entrepreneurship; Private equity; South Africa; Economic empowerment; Black economic empowerment; BEE; Postapartheid; Social entrepreneurship; Development finance; Special purpose vehicles
Settings: South Africa; Financial services; US$165 million; 1998-2002