Is WD-40 really as miraculous as people claim online?

Here’s a little-known fact: WD-40 is not a single product—it’s an umbrella brand comprising many distinct series, each with different formulations and intended uses!!! To my knowledge, there are at least six variants (and likely more—I haven’t checked the official website; curious readers are welcome to look it up): WD-40 Classic Blue Can (Multi-Purpose Maintenance Spray); WD-40 Multi-Use Penetrating Lubricant (Rust Loosener); WD-40 Specialist White Lithium Grease; WD-40 Specialist Silicone Lubricant; WD-40 Specialist Dry-Film PTFE Lubricant; WD-40 Specialist Electronic Contact Cleaner. The most widely recognized version is the "WD-40 Classic Blue Can (Multi-Purpose Maintenance Spray)," which is also the one most commonly discussed today. Yet it is far less extraordinary or magical than popular descriptions suggest. It’s best described as a versatile generalist—capable of handling many tasks, but excelling at none. Also, I must warn you: Most WD-40 products—or their imitations and budget alternatives—share a significant drawback: mild corrosiveness! While this poses no meaningful risk to human health and causes little issue for large metal components, it *can* damage items containing rubber seals, plastic-metal hybrids, coated surfaces, or precision electronic devices. Crucially, such damage rarely occurs immediately—it often manifests gradually over several days or even weeks. So while you may rejoice, thinking WD-40 has solved your surface problem, it may in fact be silently corroding your equipment from within—especially sensitive electronics, rubber, plastic, or coated parts.

(29) 'Real Records of Value Investing': Case Study on Businesses with Economic Moats—WD-40—An Investment Retrospective

1. WD-40 as of September 30, 2000—Retrospect and Reassessment ・ As of September 30, 2000, WD-40’s stock price had fallen from $26.50 to $21.88. Meanwhile, the broader U.S. stock market performed strongly—highlighting just how unpredictable equity markets can be. ・ The company’s valuation as of 1998 proved inaccurate in the short term, primarily because: ・ It assumed management would refrain from value-destructive growth initiatives—but in reality, acquisitions pursued growth *at the expense of value*. ・ In 1999, WD-40 acquired LAVA, a heavy-duty hand soap brand. ・ In 2000, it acquired Solvol, another hand-cleaning product line. ・ In 2001, it spent $72.9 million acquiring three household brands: 2000 Flushes, X-14, and Carpet Fresh. ・ These acquisitions were costlier than its earlier ‘Triple-Action’ acquisition—and bore minimal relevance to WD-40’s core business, reflecting a lack of strategic focus. ・ The consequences: ・ From fiscal years 1998 to 2000: ・ Gross margin and operating margin both declined noticeably. ・ Revenue grew modestly. ・ A reduction in tax rate partially offset the decline in net income—but net income still fell from $22 million to $21 million. (This underscores the importance of looking beyond headline numbers to grasp underlying realities.) ・ Prior to the 2000 acquisitions, WD-40 maintained a high dividend payout ratio—but net cash decreased by $24 million, shifting from a $16 million net cash position to an $8 million net debt position—potentially jeopardizing future dividend payments. ・ Given these flawed strategic decisions, we must reassess whether WD-40 remains a sound investment candidate: ・ Assuming management continues pursuing unfocused growth strategies: ・ Earnings could decline further—from $22 million to $20 million. ・ WD-40’s core business was valued at approximately $340 million (15.6 million shares × $21.88 per share + $8 million net debt). ・ With reduced capital requirements to acquire WD-40, the return on invested capital falls to 5.75% (close to the 5.7% recorded in 1998). Assuming the dividend payout ratio declines from 86% of earnings to 76%, the resulting cash-on-cash return drops to 4.5%.

WD-40 Completes Sale of X-14 and Carpet Fresh Brands

2 days ago

WD-40 Company has completed the sale of its X-14 and Carpet Fresh brands to Malco Products, Inc. The divestiture aims to allow the company to focus resources on long-term growth within its maintenance products segment.

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