Join Now

Microcap Activism is a Hard Road to Travel

Some people know me by my book, Dear Chairman, but what they don’t know is I’m an avid microcap investor.

Some people know me by my book, Dear Chairman, but what they don’t know is I’m an avid microcap investor. Along with teaching value investing at Columbia Business School, I co-manage a fund called Bandera Partners and we are active in the microcap space. I sent Ian one of my quarterly letters from a few years ago describing a long and arduous story with a microcap company, and he thought it was interesting enough to share with the world.

In 2003, I found a company called UCI Medical Affiliates with a market capitalization of about $3 million.  I was in my twenties, working as an analyst at a distressed debt hedge fund in New York City.  UCI, which ran urgent care clinics in South Carolina, had recently emerged from a rare bankruptcy that preserved the equity. Several large blocks of stock were available, but I failed to convince my superiors to buy them.  I then bought some shares in my PA and embarked on an intense, eight-year, hard knocks education in microcap investing.  I’ve been hooked on microcaps ever since, for better and for worse.

In early 2011, Bandera Partners (which I run with my partner Greg Bylinsky) negotiated UCI’s sale for $65 million.  It felt like a minor miracle.  A mere two years earlier, UCI’s valuation had fallen all the way back to the $3 million it garnered when I first found it.  I ended up writing 6,000 words about the investment in our next quarterly letter.  I also attached some of our correspondence with UCI’s majority owner, Blue Cross Blue Shield of South Carolina, as an exhibit.  The letter was so well-received by our investors, that it gave me confidence to write “Dear Chairman.”  The book takes its structure from this quarterly letter—a fun narrative followed by an original letter from shareholder to company.

I’m excited to share the UCI saga here, for investors that have learned the hard lessons that microcap investing offers.  It is a lurid tale with all the hallmarks of value investing: drug addiction, suicide, prison, and, worst of all, accounting restatements.  When I waltzed into this investment, I was incredibly naïve about public companies, boards of directors, and corporate governance.  In fact, with UCI I committed the cardinal microcap investing sin: I bought into a company controlled by a majority shareholder.  Don’t worry, as you’ll see, it got much worse.

You can read the full story in my Bandera Partners Q1 2011 Letter [HERE].

===> Interact and learn with 250+ of the best microcap investors on the planet. [Join Us]

MicroCapClub is an exclusive forum for experienced microcap investors focused on microcap companies (sub $500m market cap) trading on United States, Canadian, European, and Australian markets. MicroCapClub was created to be a platform for experienced microcap investors to share and discuss stock ideas. Since 2011, our members have profiled 1000+ microcap companies. Investors can join our community by applying to become a member or subscribing to gain instant view only access. MicroCapClub’s mission is to foster the highest quality microcap investor Community, produce Educational content for investors, and promote better Leadership in the microcap arena. For more information, visit and

Sign up for more like this.

Get Alerted to our Next Educational Blog Post

Related posts
Finding Ideas Before Others

Finding Ideas Before Others

Over time you realize finding ideas before others often means finding ideas with others. Stock picking isn’t a zero-sum game.

9 min read
We Are All Fighting The Same Battles

We Are All Fighting The Same Battles

A good rule of thumb is to be quieter than you want to be. Don't give people a reason to root against you. It's an asset when people can't tell whether you are winning or losing.

3 min read