Is WD-40 really as effective as claimed online?

Yes—but 99% of the online hype about WD-40 comes from clickbait content creators. These creators never mention that WD-40’s functions are highly specialized; instead, they only tout what it *can* be used for. As a result, many novices get lured in—intending, for example, to clean precision instruments—only to buy WD-40 and discover too late that it’s actually a rust remover and lubricant. So while WD-40 is indeed very useful, users must carefully match its specific functions to their actual needs.

(29) 'Real Records of Value Investing': Case Study of a Business with an Economic Moat—WD-40: An Investment Retrospective

1. WD-40 as of September 30, 2000—A Retrospective and Reassessment ・ By September 30, 2000, WD-40’s stock price had fallen from $26.50 to $21.88. Meanwhile, the broader U.S. stock market performed quite well—highlighting just how unpredictable equity markets can be. WD-40’s two-year annualized return stood at −9%. ・ The 1998 valuation proved inaccurate in the short term, primarily because: ・ It assumed management would not sacrifice value in pursuit of growth—yet all the acquisitions made during this period pursued growth *while eroding value*. ・ In 1999, WD-40 acquired LAVA, a heavy-duty hand soap brand. ・ In 2000, it acquired Solvol, another hand cleaner. ・ In 2001, it spent $72.9 million acquiring three household products: 2000 Flushes, X-14, and Carpet Fresh. ・ These acquisitions were costlier than the company’s earlier ‘three-in-one’ product line—and bore little relevance to WD-40’s core business, indicating a lack of strategic focus. ・ The consequences: ・ From fiscal years 1998 to 2000: ・ Both gross margin and operating margin declined noticeably. ・ Revenue grew slightly. ・ A decline in the tax rate partially offset the drop in net income—but net income still fell from $22 million to $21 million. (This underscores the importance of looking beyond surface-level numbers.) ・ 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 WD-40’s attractiveness as an investment today: ・ Assuming management continues pursuing unfocused growth strategies: ・ Earnings could fall further—from $22 million to $20 million. ・ The cost of acquiring WD-40’s core business stands at approximately $340 million ($21.88 per share × 15.6 million shares + $8 million net debt). ・ Due to the reduced capital required to acquire the business, the return on earnings 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%.

Why WD-40 (WDFC) Shares Are Sliding Today

Jul 20, 2026

WD-40 Company shares fell 2.8% despite beating Q2 earnings as rising oil prices and geopolitical tensions drove specialty chemical input costs up to 100%. Margin pressure from these raw material surges outweighed initial positive financial results.

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Why WD-40 (WDFC) Shares Are Sliding Today

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