Activists

This weeks WSJ had a special feature on the success of activists looking at 71 activist campaigns.  For those who missed it, I recommend taking a look.  The bottom line is that some activists are associated with gains in value and some not.  That's not a surprising conclusion.  Anecdotal analyses such as this one are interesting but are generally on a small scale and have a difficult time controlling for all of the various factors that can influence outcomes.

A more thorough analysis is contained in a recent article entitled: Myopic Investor Myth Debunked:The Long-term Efficacy of Shareholder Advocacyin the Boardroom.  They examine a sample of 1,039 activist campaigns.   In fairness, these authors reach a similar conclusion as the WSJ: activist representation on the board is the vehicle through which meaningful gains are produced.

In the same WSJ edition are the stories about Nelson Peltz investing $2.5 billion in GE (resulting in a 5.3% stock boost) and news that Ellen Kullman will retire after 'winning' an activist campaign at DuPont.

All the best,

Ralph