poison pills

Dan Loeb Loses For Winning For Losing

Dan Loeb is probably feeling pretty good about himself right now. He made $700 million last year, a year in which his hedge funds were up 25%. And while his Dow foray hasn’t panned out quite yet, he managed to snag victory—total, unconditional, here’s a $10 million check for your troubles victory—from the jaws of (Delaware Chancery Court) defeat.

So the $5.7 million or so Sotheby’s spent winning that case only to completely capitulate three days later didn’t do it any good. But it certainly looks likely to not be so great for newly-minted Sotheby’s directors and other such activist investors. Read more »

In response to the auction house’s adoption of a ‘poison pill,’ in response to this, the hedge fund issued the following statement: Read more »

  • 05 Nov 2012 at 1:09 PM

What Does Netflix’s Poison Pill Do To Carl Icahn?

Are you not bored by corporate-raider battles? Netflix just adopted a poison pill in reaction to Carl Icahn’s acquisition of 9.98% of its stock and, of course it did, what else would it do? Just once I want to see a company say “actually you’re right, we’re hopeless, let’s sell this dog, highest bidder wins, and Icahn if you can come up with the money feel free to do a tender offer to save us the trouble”? I guess it’s no surprise that no one does – if you’re an activist or raider, you only get involved in stocks that (you think) need action and/or raiding and whose managements disagree – but, still. It’s not obvious that there are two sides to every corporate strategy question, and lots of companies that end up selling start off with the traditional pill-rattling.1

There are issues of temperament here; I suppose a 10% Warren Buffett stake would elicit a different response. Normally pills are justified as protecting vulnerable, innocent, long-term shareholders from being bamboozled and coerced by evil fast-money short-term corporate raiders, but are mostly viewed as bad governance by entrenched managements, as Icahn himself quickly noted. There’s, like, one example this century2 of shareholders actually being bamboozled and coerced by corporate raiders. Conveniently, though, that example was when Icahn acquired 80% of CVR Energy and then was kind of a jerk to the remaining shareholders, which allowed lots of other boards to feel better about their own anti-Icahn poison pills.3

Anyway some things will happen and other things won’t happen and eventually Carl Icahn won’t own any NFLX shares any more and your guess about his manner and price of exit is way, way better than mine. Let’s talk about something else and dorkier here.4 Read more »