Wishbone votes against Avnet's chairman over a $650 million convertible with a $70.27 conversion price

A 400,000-share holder says no to the chairman

Wishbone Management LP, one of the private partnerships of Ruane Cunniff, the New York value adviser best known for its Sequoia strategy ², wrote to Avnet shareholders on November 3, 2026, with a grievance and a vote↗ ¹. The grievance: it owns 400,000 shares of the Tempe, Arizona electronics distributor (Nasdaq: AVT), once owned more, and sold down for lack of confidence "in the way the company was managed financially" ¹.

The vote: no on chairman Rodney Adkins, a director since 2015 and chairman since 2018 after 30 years at IBM▲+1.71% — IBM, up 1.71 percent today, and no on Ernest Maddock, the audit committee chair and former Micron▼−6.98% — Micron, down 6.98 percent today chief financial officer ¹³. Its remedy is board composition, one significant non-management shareholder and one more independent director with an investing background ¹.

The election math, and the financing behind it

Directors stand for re-election on Friday November 20 at Avnet's headquarters↗, by a majority of votes cast, and a nominee who fails must offer a resignation the board then accepts or refuses ³. With 82,232,857 shares outstanding at the September 21 record date, Wishbone's 400,000 shares are under half of one percent ³.

The target is one decision: on September 3, 2025, Avnet priced an upsized $550 million convertible note↗, 1.75 percent coupon, due 2030, with a conversion price of $70.27, a 35 percent premium over the $52.05 close on September 2 ⁴. Buyers took the full option, the deal closed at $650 million on September 5, and about $100 million of the proceeds repurchased 1.92 million shares ⁵.

Principal on any conversion is paid in cash↗, the excess above $70.27 in cash or shares at Avnet's▼−3.46% — Avnet, down 3.46 percent today election, and holders cannot convert early until the stock clears 130 percent of the conversion price, about $91.35, for 20 of 30 trading days ⁵.

The quarter that answers the letter

The letter went out at the bottom of a cycle the filings show plainly: seven straight quarters of falling year-over-year revenue through March 2025, then growth of 1.0, 5.3, 11.6, 33.9 and 47.7 percent in the five quarters after ⁶.

At the November 3 close of $88.73 ⁷, $70.27 is roughly a 20 percent discount, as the letter argues, and the full $650 million would convert into about 9.3 million shares, beyond the "nearly 8 million" it cites on the base amount ¹. Avnet's defense sits in the same documents: 1.75 percent money, 1.92 million shares repurchased alongside, and no shares owed while the stock sits under the trigger ⁵.

The next morning brought the rebuttal: first-quarter fiscal 2027 sales of $10.718 billion↗, up 81.7 percent (71 percent excluding the extra week in the 14-week quarter), adjusted EPS of $3.63, up 332 percent, return on working capital of 25.2 percent against 9.8 percent a year earlier, and a January guide of $11.1 to $11.4 billion in sales and $3.90 to $4.10 in adjusted EPS on 87 million diluted shares ⁸.

Chief executive Phil Gallagher cited AI and data center demand among the verticals carrying it ⁸.

Two numbers decide who was right

The recovery Wishbone says the board financed too cheaply is in every line of the quarter. What remains is arithmetic: if the stock holds above $91.35 for the required stretch, holders can convert, and the 87 million share base starts absorbing stock delivered at $70.27 ⁵⁸.

Watch the November 20 vote count on Adkins and Maddock, and whether the board answers the letter at all; The Inference covered the valuation gap to Arrow Electronics on October 30 ⁹. Priced at a 35 percent premium in September 2025, the conversion price became a 20 percent discount fourteen months later ⁹.