Shareholder Activism

Southwest shareholders needn’t act like passengers

14 Aug 2024

Rabble-rouser Elliott escalated its battle with the $15 bln airline by unveiling a dissident board slate. The timing is odd: sitting directors just won overwhelming support. It’s a question of persuading investors they deserve a smoother ride than sheep-like flyers tolerate.

Starbucks has too many baristas in the boardroom

12 Aug 2024

The $90 bln coffee chain’s US sales are down as growth in China flags. Add a newish CEO and it seems a tasty brew for rabble-rousers like Elliott. But the complex interplay between former boss Howard Schultz, angsty labor reps and even more activists threatens a bitter finish.

Reckitt gives weak scrub to valuation stain

24 Jul 2024

The $40 bln Dettol maker is selling cleaning brands and pledging to exit its baby milk unit. The result should be a leaner company and less depressed share price. But the lack of a clear timeline limits the benefit and leaves investors fretting over infant formula litigation.

Smith & Nephew faces long and painful activist fix

4 Jul 2024

Cevian has taken a 5% stake in the $11 bln underperforming London-listed medical equipment maker. Curing its depressed share price will require deep operational surgery. While that may take time, a breakup could be a second treatment further down the line.

Autodesk left a door ajar for its pushy investor

18 Jun 2024

Despite a plum niche developing software for architects, the $50 bln firm’s performance has sagged. Rabble-rouser Starboard Value has cookie-cutter fixes. But the company’s hand is weakened by poor disclosure that invites gripes about activists’ favorite target: executive pay.

Japan’s value push is starting to lose momentum

14 Jun 2024

Notwithstanding big activist campaigns, tallies of shareholder proposals tabled for company annual meetings this month look underwhelming. The stock rally is fast fading too. Japan has a long history of disappointing investors. The stakes for how fund managers vote are rising.

Barbarians at Southwest gate overdo upgrade plea

13 Jun 2024

The $17 bln airline’s slow response to weak performance made it an easy target for pushy investor Elliott. Boss Bob Jordan may struggle to keep his job, let alone reshape the business model. Yet his new dissident is too facile about jettisoning defining parts of the culture.

Texas Instruments: don’t mess with Elliott

7 Jun 2024

The $175 bln chipmaker is in a sensible expansion mode, but the pushy hedge fund raises reasonable concerns about cash flow. Even after generous US subsidies, it will take big uplifts in customer orders and market share to justify the investment. There’s scope to scale back.

Bill Ackman hitches ride on meme-stock bandwagon

4 Jun 2024

The hedge fund boss has attracted 1.2 mln X followers to his political and investment agendas. He’s leveraging the social media clout by selling a $1.1 bln stake in his Pershing Square firm. A richer valuation multiple than Man Group or Blackstone emits an essence of GameStop.

Breakup alarm rings at $50 bln building superstore

29 May 2024

Johnson Controls, which installs heating and cooling systems, promised growth from cross-selling fire and security services when it bought Tyco in 2016. The deal hasn’t delivered and neither has boss George Oliver. Pushy investor Elliott may help unclog its valuation filter.

Toyota investors can give chair a year for tune-up

29 May 2024

Proxy advisers Glass Lewis and ISS want shareholders not to re-elect Akio Toyoda atop the $300 bln automaker’s board. There’s logic to it. But the former CEO has pledged to address governance problems at subsidiaries. If he doesn’t, it makes a stronger case for booting him out.

Japanese funds will unlock powerful virtuous cycle

28 May 2024

Pushy foreigners helped boost short-term value in the Nikkei stock index. In this Exchange podcast, Hiroyuki Otsuka, CEO of Newton Investment and ex-Carlyle executive, explains how local asset managers will create the next wave of gains and usher in dramatic change for Japan.

Japan’s value push will turn into a shove

16 May 2024

Shareholder meetings next month will help gauge progress in the official campaign to boost corporate performance. Toyota, SoftBank and Fast Retailing have not signed up. Given the importance of ensuring resilience in the $4.2 trln economy, Tokyo is likely to apply more pressure.

Sparring shareholders cause governance train wreck

13 May 2024

Norfolk Southern CEO Alan Shaw narrowly won re-election, but the chair didn’t, and three of seven dissident nominees got board seats. The outcome augurs ongoing clashes at the $50 bln US railway operator. It’s a pitfall of the split tickets enabled by universal proxy cards.

Sumitomo offers a glimpse of activism future

8 May 2024

The shares of the powerful $34 bln trading house surged on Warren Buffett's support. US investor Elliott is using the momentum to squeeze more value out of the company. The next big targets for pushy investors in Japan are marginal, not blatant, underperformers.

Vote no to bashing proxy advisers

25 Apr 2024

Corporate leaders at JPMorgan and AstraZeneca bridle when ISS and Glass Lewis criticize their governance. No wonder: Some high-stakes shareholder votes this year will be uncomfortable for feather-bedded bosses. Proxy firms are problematic, but they do more good than harm.

Shell’s value gap is more strategy than geography

19 Apr 2024

CEO Wael Sawan may shift the $230 bln UK oil giant’s listing to New York if a discount to rivals like Exxon Mobil persists beyond 2025. But Shell’s shifting priorities, slower growth, and unreliable dividends weigh on its valuation. Those factors defy a superficial fix.

Salesforce’s activist makeover faces trial by M&A

16 Apr 2024

A swarm of pushy investors last year pushed the software firm into cutting costs, returning capital, and de-emphasizing dealmaking. Now it’s mulling a takeover of $11 bln Informatica, the WSJ says. The price will signal whether founder and CEO Marc Benioff has changed his ways.

Bob Iger now under pressure to wow with an encore

3 Apr 2024

Disney’s CEO worked some magic to stop mouthy Nelson Peltz from being elected to the board. The next trick is to fix streaming and narrow a valuation gap with Netflix. Even if Iger pulls another contract extension out of his hat, shareholders want to see a financial showstopper.

AI hype will be hard to puncture

20 Mar 2024

Short-seller Hindenburg is attacking $80 bln Equinix, whose data-center investments have been pumped up by artificial-intelligence exuberance. US regulators are also starting to target some of the hot air. Even so, the valuation bubble is more likely to deflate slowly than pop.