A tradition for my economics classes is to attend the HNI Annual Shareholder's meeting. CEO, Stan Askren, is a powerful speaker and a classy man who took the time to talk to my class before speaking for the 44,000,000+ shareholders on the statement of financial condition. Last May, the stock stood at $43.31 per share and today closed at $22.56 for a drop of 48%. My students wondered how to explain the drop in the world's second largest office furniture manufacturer and largest hearth producer.
The office furniture market is dominated by three manufacturers, HNI, Steelcase, and Herman-Miller with market shares approximately 13%, 14-15%, and 10% respectively. The market structure is oligopoly with all firms making a homogeneous product. I believe the market has valued the companies in line with the products they produce by equating the stock prices. Today, Steelcase closed at $12.03 and Herman-Miller at $23.99. The market has simply given the producers a value that reflects the output.
The meeting is replayed here. If you listen to the introductions, you'll hear my name humbly mentioned. HNI is all class.