“A lot of people die fighting tyranny. The least I can do is vote against it.”
– Activist Carl Icahn, Texaco Annual Shareholder Meeting 1998
Could 2009 be a Golden Age for Activist Investors? Ken Squire wrote a pretty convincing case in Barron’s this week and I can only say that it’s about time.
His opening point is that people involved in shareholder activism weren’t as shocked as the rest of the nation when the Big 3 Auto CEO’s flew in to DC on separate private planes to beg for bailout money. How could they be shocked, they’ve been fighting this type of waste and legalized embezzlement for years!
The article goes on to point out that we’re in a market that is too focused on the macro to create value for a company’s share price, so the shareholders themselves must go out and create their own value. Against the backdrop of an investing public that’s disgusted with corporate greed, boards of directors are more vulnerable than ever to challenges from activists. One great example is the quick surrender of Toreador (TRGL), an energy company that, within 8 days of receiving a warning of a possible proxy battle, caved in to all demands, including the canning of it’s chief executive!
Carl Icahn, get ready for your close-up. If the Golden Age is upon us, expect efficiency, democracy, realigned executive compensation and tons of M&A to be coming to a stock holding near you!
Read the Full Article ($ subscription required): A Golden Age for Activist Investing (Barron’s)
Full Disclosure: No positions in any stocks mentioned.