Mindbody—the very name suggests connection and cooperation, like a meditating yogi sitting knotted like a pretzel chanting, “Om.” Started in little ol’ San Luis Obispo, the tech business sells software to help manage wellness and fitness enterprises such as gyms, spas, and salons. Many SLOcals thought when it came to fruition in 2000, it was the beginning of a tech boom for the Central Coast, and a job at Mindbody was a prized plum.
The whole thing felt like solid gold, but it turns out its now ex-CEO Rick Stollmeyer wanted to convert his 20 percent share in the company, which he took public in 2015, into real gold and also hold onto power, and the way to do it was to skirt the other shareholders and the board of directors to orchestrate a deal to sell the company to private equity firm Vista Equity Partners in an arrangement that devalued the company’s shares by a dollar.
Hey, what’s a dollar, right? You probably have more loose change in your La-Z-Boy. Well, when there’re 48 million shares trading hands, it adds up to … come on, you can do it. Yes, 48 million buckaroos, which is exactly what a Delaware judge decided Stollmeyer and Vista owe Mindbody’s former shareholders. Delaware’s Court of Chancery and its regally named Chancellor Kathaleen St. Jude McCormick essentially ruled that Stollmeyer and Vista colluded like slimeballs to enrich Stollmeyer and save Vista a mountain of money on the takeover.
“Stollmeyer quickly came to believe that selling to Vista gave him the unique opportunity to both gain liquidity and remain as CEO,” McCormick wrote in her ruling. ‘”He did not strive in good faith to pursue the best transaction reasonably available. He instead pursued a fast sale to Vista to further his personal interests.”
Rick, you had a fiduciary duty to your fellow shareholders to prudently protect their interests, but instead it was all about you, dude, which is totally gross tech-bro titan-of-the-universe bullshit. Bad, tech-bro! Bad!
The extra slimy part of the deal, McCormick wrote, was that Stollmeyer purposely kept other shareholders ignorant of the sales process, leading them to believe the deal was fair. Vista sounds positively unctuous as well, inviting Stollmeyer to a 2018 summit of ex-CEOs of public companies Vista had previously acquired to make a presentation “advertising the immense wealth that [ex-CEOs] had achieved by selling to and working for Vista,” McCormick wrote.
The bottom line was Stollmeyer needed capital fast. He had other family businesses that needed cash infusions and he promised “a local college” $3 million, probably to get his name on something to stroke his tech-bro ego. According to McCormick, Stollmeyer fell in “love” with Vista and their golden calf promises. She concluded that a “Vista-smitten Stollmeyer effectively greased the wheels for Vista by stalling the board process.”
So greasy! So much filthy lucre, amirite?
And speaking of filthy lucre, did you see New Times political cartoonist Russell Hodin‘s image in last week’s edition concerning the gerrymandered Patten Map and a court’s decision to rescind it and force SLO County to draw a new map and pay $300,000 for legal fees to SLO County Citizens for Good Government, which brought the suit against the map? Because 1st District Supervisor John Peschong sure did. He clipped it out and waved it around at the last Board of Supervisors meeting as the board was voting on a date to repeal and replace the map.
“The court did let the map go forward, thus making it a legal map,” Peschong argued. “I don’t know how many of you have seen the New Times cartoon, but here’s a great little cartoon with myself, Supervisor Arnold, and Supervisor Compton in it and a check for $300,000 that we’re going to be giving to SLO County Citizens for Good Government. I won’t be supporting [the item] today because I don’t want this cartoon to come true.”
Oh boohoo! You and the former conservative majority got caught trying to rig voting districts in your favor, and now you’re butthurt about it. Whine me a river.
The new liberal majority also voted to reverse the former conservative majority’s rule to raise individual campaign donations to $25,000 down to the state’s cap of $5,500. More filthy lucre! What we need is to get money out of politics, but neither party seems to have the political will to demand publicly funded elections.
Shockingly, 3rd District Supervisor Dawn Ortiz-Legg brought up the ugly truth: “Money in politics is what makes people get elected. So, it’s naïve and I think it’s also completely shortsighted in thinking that somehow bringing this down to $5,500 is going to take money out of politics. We’re going to have more dark money in politics.”
Barf. If you feel the need to shower, I get it.
I also suggest you head to Woods Humane Society and pick out an adorable new puppy. They have a pack of them mostly sent from other overflowing California shelters probably due to pandemic pets that didn’t get spayed or neutered due to a lack of resources or access to services. Hug it out with Fido, but clip and snip, people! Sheesh! Δ
The Shredder is paid in light machine oil. Grease its gears at shredder@newtimesslo.com.
This article appears in Apr 6-16, 2023.
Hey Shredder! Why don’t you make the effort to go beyond the easy click bait headline about Mindbody and Rick, and maybe read the facts of the Vista sale and the ruling? Vista was the highest bidder, by a lot. 20 other companies were engaged to make a bid, and none came close to Vista’s. So the CEO “loved” Vista…. If you built a company and dedicated your life to it for two decades would you want to sell it to a company you really liked, especially if that company was clearly the highest bidder? Mindbody’s shares were under $20 at time of sale, all Mindbody employees were thrilled at the $36.50 stock sale price….. not to mention what would have happened to its valuation a year later once COVID hit. Pretty sure this is called capitalism, and those investors that sued are the greedy ones.