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Activist Stocks: Activism destroying long-term value?

Activist follower, decent day. Activist related news and stories for June 10 below - as usual the free newsletter is on a 24-hour delay; Activist Strategy subscribers get it on publication day [you can get a 2-week free trial here]. Tip us off at @activiststocks and here’s the free daily newsletter sign up. In other news - we’re launching a new catalyst watchlist for Activist Strategy with ~50 names that we mentioned the other day, here’s another quick look - if interested in a getting the first copy free you can sign up for a free trial to Activist Strategy below. 

News-

  • Trian Partners made a statement about the DuPont vote [link]

  • Hill International postpones its annual meeting to build a better defense against Bulldog Investors [link]

  • Lawndale Capital got a win at Willbros, convincing shareholders to vote to eliminate Willbros' current system of staggered three-year terms for its board of directors. Moving to annual elections.

  • Eminence Capital dumps half its Men’s Wearhouse stake, still owns 6.6%.

  • Osmium Partners is pushing the Rosetta Stone buyout (recall they are “in talks”), but they want a double in stock price to $16 a share [link to their rationale]

  • FrontFour Capital will fight Legacy Oil + Gas in the buyout by Crescent [link]

  • Activist group of Ronald Chez and Sabra Capital, update us on how things are going at Cinedigm - feel free to apply for a board position [link]

Stories-

  • Fiat head, Sergio Marchionne, is hoping that the intervention of an activist will get GM to the M&A table. His reasoning, beyond his copious comments on how the industry if fucked with consolidation, is that GM caved to activist investors with the $5 billion buyback, so it’ll likely cave when it comes to a merger [link]

  • In a new paper, Long-term Effects of Hedge Fund Activism, Wei Jang talks activist impact. Really all you need to know is the abstract, “We find no evidence that activist interventions, including the investment-limiting and adversarial interventions that are most resisted and criticized, are followed by short-term gains in performance that come at the expense of long-term performance. We also find no evidence that the initial positive stock-price spike accompanying activist interventions tends to be followed by negative abnormal returns in the long term; to the contrary, the evidence is consistent with the initial spike reflecting correctly the intervention’s long-term consequences. Similarly, we find no evidence for pump-and-dump patterns in which the exit of an activist is followed by abnormal long-term negative returns. Our findings have significant implications for ongoing policy debates” [link]

What we’ve been working on-