Daily Activist Investing May 18: Ackman's "Big" Position

Activist temptresses, Sad day for some of you. We’ve been working on Activist Strategy the last few months and with its launch this week, that means non-subscribers will be getting the daily newsletter on a 24-hour delay. Look for more details on this change in an email later today. In any case, major activist stories and news for May 18 below. Taking taking leads at @activiststocks, daily newsletter signup, ICYMI the latest newsletter is here.

News-

  • On Friday, David Einhorn noted that its Greenlight Capital sold half its activist stake in Civeo. Now owning 4.7% of the “man camp” company. This comes after JANA Partners blew out of its position last year.

  • Vertex Capital sold off 15% of its Axelius Technologies stake, but still owns 5.6% of the company.    

  • Ann Taylor finally got itself sold, to the parent company of Lane Bryant, Ascena. Engine Capital was involved last year, pushing for a buyout. Then, earlier this year, Golden Gate was reported to be interested. Shares are up 20% on the day and topping 2006 all-time highs. This is one of the few “buyouts” in the apparel space that have materialized.

  • Carl Icahn puts out a letter on Apple, calls for upside to $240 a share. Too lazy/disinterested to read, so you’ll have to do the work here [letter]

  • As activists, this doesn’t really impact you all, but as hedge fund followers...Chase Coleman’s Tiger Global is getting a major shakeup. Its Feroz Dewan and Caleb Watts are both leaving. Feroz runs the flagship fund and co-manages one of two long-only funds; he’s leaving to start his own fund. Caleb is leaving to manage his own money.  

  • Bill Ackman’s Pershing Square has a position that’s getting close to 15% of capital, per its 1Q conference call today [call coverage] Ackman said they have a few months before having to make a disclosure on the position. This’ll be multi-billion position for Bill. A little hesitant to speculate after Ackman pulled a fast one on us at Sohn, but we’ll indulge you later today via Activist Strategy.  

Stories-

  • In the spirit of keeping with our Weekend Feature theme, @stephengandel has a piece up at Fortune on McDonald’s and activist investors. The thing is, many of these “activists” buying up stakes in MCD are buying tiny stakes. JANA is the big name, but he owned a stake that was 8x what it is now in 2014 before selling it off. A couple of other funds, Highfields and Glenview, bought shares, but aren’t activists. Keith Meister and Corvex Management are the most interesting - being known for unlocking real estate value. Recall Ackman’s REIT thesis for MCD back in 2005. And yet, as Stephen notes, “But it’s not clear how much of a boost that would offer McDonald’s shares. According to its latest 10-k, McDonald’s says it has nearly $25 billion in land and buildings. Just $6 billion of that is in actual land. The rest of that $25 billion is the approximate value of its buildings and equipment, like signs, which would have much less value to another owner. McDonald’s market cap is over $90 billion, so the company’s real estate would have to fetch considerably more on its own to make a difference to shareholders” [link]