CDI Corporation Stock Under Performs NYSE

CDI Corporation stock price has been under performing for years against the average NYSE stock. In this letter, I detail this under performance of their stock over the periods that Roger H Ballou has been the CEO. It goes on the highlight some of the potential reasons why it has consistently under performed against the average NYSE stocks. It highlights some of the problems that exist in their revenue streams. In particular the problems with their wholly owned subsidiary, Management Recruiters International, also known as MRI Network or MRINetwork.

It cites some of the specific ethical and business issues that Roger H Ballou has consistently refused to address. It questions his leadership approach and asks why he continues to ignore the these ethical and questionable business practices.

It also shows the results of the Management Recruiters Franchisees own survey that reveals some remarkable levels of dissatisfaction and an insight into the health of this global recruitment franchise, owned by CDI Corporation.

---------------------------------- Start of 9th email sent to Roger H Ballou ---------------------------------

29th October 2008

Mr Roger H Ballou
President and CEO
CDI Corporation

Mr Ballou

CDI Corporation Stock Under-Performance

I am concerned about CDI Corp stock under performance. I have checked the track record of CDI Corporation stock values. As you know Mr Roger H Ballou, the CDI Corporations own web site (CDICORP.com) has a very useful stock comparison facility that allows comparisons to other New York Stock Exchange (NYSE) stocks over various periods of time. As this stock is listed in the NYSE, (Ticker CDI) this is a valid and meaningful comparison. I have been doing some comparisons and benchmarking of stock over a number of periods and it reveals some rather disappointing results for all shareholders / stock holders.

As you know Mr Roger H Ballou, you became CEO in October 2001. Since then, the performance of the stock has consistently under performed against the average NYSE stock.

The following results take a number of time periods and compare the starting date value of CDI Corp stock price against the price today 29th November 2008. The benchmark used is NYSE, which is where it is listed, so this is a valid stock comparison.

CDI Corporation (NYSE:CDI) Stock Under Performance:

Starting with your arrival date as CEO Mr Roger H Ballou of October 2001. CDI Corp stock has under performed against the NYSE average.

If we now take other date periods we see the same under performance of CDI Corporation stock.

Over a 5-year period CDI Corporation stock has under performed against the NYSE average.
Over a 3-year period CDI Corporation stock has under performed against the NYSE average.
Over a 2-year period, CDI Corporation stock has under performed against the NYSE average.
Over a 1-year period CDI Corporation stock has under performed against the NYSE average.
Over a 6-month period CDI Corp stock has under performed against the NYSE average.
Over a 3-month period CDI Corp stock has under performed against the NYSE average.
Over a 1-month period CDI Corp stock has under performed against the NYSE average.

This is a very poor performance of CDI Corporation Stock, and does not show your stewardship of CDI Corp in a very good light Mr Roger H Ballou.

Why do you think that CDI Corp stock has under performed against the average stock value so consistently since you have been CEO of CDI Corp, Mr Roger Ballou?

Management Recruiters International Franchise Problems:

Perhaps the decline of one of CDI Corporation's main revenue streams is partly to blame. One of the significant revenue streams for CDI Corp is the franchise Management Recruiters International, also known as MRI Network or MRINetwork. There have some ethical franchise problems with this for some time that I have already written to about. However you have consistently refused to address these ethical franchise problems.

For example:

  • Your false and misleading statements you made to CDI Corp shareholders on 26th July 2007. Do you not think that you should correct these misstatement made on record to CDI Corp shareholder Mr Ballou? What do you think your silence says about your ethics Mr Ballou? What do you think your silence says about the ethics and business practices of CDI Corporation Mr Ballou?
  • The unanswered Sarbanes-Oxley questions for CDI Corporation. That is, how and when CDI Corp wrote-off the MRI Network debt of more that 170,000 UK Pounds (approximately $316, 000 USD), under your legal SOX obligations. Do you not think that this issue needs to be clarified Mr Roger H Ballou? You do realise that this loss of around $316,000 US Dollars came straight off the bottom line of CDI Corporation profits and therefore affects all CDI Corp stock holders?
  • Joseph R Seiders affidavit statements made under oath to Ohio Court that do not appear to be truthful. You silence on this point is remarkable Mr Roger Ballou. Is your silence on this simply because you agree with my conclusions that Mr Joseph R Seiders statements cannot be true? What do you think this say about the ethics of you and your top management team at CDI Corporation Mr Roger H Ballou?
  • The years of misrepresentation by MRI Network / Management recruiters International. You have never addressed this point Mr Ballou. Does that imply that you are quite comfortable with this misrepresentation for years of someone who's franchise agreement had expired that your team continued to represent as a regular MRI Network franchisee to all real franchisee and clients alike. Where you content with your teams encouragement to inter-work with him whilst he continued to fail to pay royalties? Do you think your demonstrable track record of this dubious practice will attract new franchisees into the network?
  • Breach of Management Recruiters International franchise agreement. This point has some quite serious implications that I believe allows most, if not all current Management Recruiters International franchisees to terminate their franchise agreements. In view of the MRI Network franchisee dissatisfaction that was revealed in the recent survey by MRIFA, perhaps you should address this point.
  • Steve Mills side-stepping of responsibility for the years of MRI Network misrepresentation. You will recall Mr Roger H Ballou that I also asked if you take no responsibility for this misrepresentation. So far you have chosen to avoid answering that question too.

Do you not think it is about time you faced up to these issues Mr Roger H Ballou? Your continued silence is damaging to the long-term health of MRI Network and the value of CDI Corporation Stock.



MRI Network / Management Recruiters International Franchisee Dissatisfaction.

What is also a valid point is the dissatisfaction that Management Recruiters International have recently registered in the survey carried out by MRIFA (2008). As you know Mr Roger H Ballou, the MRIFA is the Management Recruiters International Franchise Association and is the voice of MRI Network Franchisees. It is run by Management Recruiters International franchisees and represents their collective views. In the recent survey carried out in 2008 it showed some remarkable results of dissatisfaction of the Management Recruiters International franchisees.

"It revealed that only 20% of the Management Recruiters International franchise community would renew their contracts if called upon to do so."

Alternatively you could say that 80% of Management Recruiters International franchisees would not renew their franchise agreement! That, in my opinion, Mr Roger H Ballou, shows an underlying problem with the Management Recruiters International franchise. Do you take any responsibility for this appalling result and indication of franchisee dissatisfaction Mr Roger H Ballou? As you know, Management Recruiters International provide a significant part of CDI Corporations bottom line profits. The demise and dissatisfaction of the MRINetwork franchisees can only damage profits further.

Unanswered Questions by Roger H Ballou, CDI Corporation.

As the CEO of CDI Corporation, the responsibility ultimately sits with you, Mr Roger Ballou. The stock performance has done very poorly since you have been in charge. You have presided over CDI Corporation during some very dubious franchise and business practices as cited above. Whilst I have written to you many times about these issues, your approach has been to consistently refuse to address these ethical franchise and CDI Corp business issues. Your 'head in the sand' approach and your unwillingness to address these ethical problems, I believe, is damaging to CDI Corporation stockholders. Equally, it is damaging to Management Recruiters International franchisees, who provide a substantial input to CDI Corp bottom line profit, which is reflected in the performance of CDI Corporation stock price.

Do you now not think it is about time Mr Ballou, that you addressed these problems and replied to me about of these ethical issues as demonstrate by CDI Corporation under your stewardship?

As always, my door is still open to hear your answers.

I shall be placing a copy of this open letter on my web site.

Sincerely,
Bob Stewart
CDI Corporation Shareholder



---------------------------------- End of 9th email sent to Roger H Ballou ----------------------------------

A recent independent article by stocks.criccookmusic.com who list stock gainers and stock losers from different stock exchanges list CDI Corporation amongst the noted losers. Specifically they list CDI Corporation as ranking the ninth biggest loser on the NYSE by percentage. The date of this article was 14th September 2010.


Also see: