Paul Singer really wants to win his proxy contest with Arconic. It’s not just that he expects to make a lot of money on Alcoa’s former aerospace and automative parts maker should said company find itself run by literally anyone other than current management. It’s also personal: Former CEO Klaus Kleinfeld literally, if rather weakly and ungrammatically, threatened to expose Singer’s private affinity for Indian headdresses and other predilections. Then, after Arconic fired him for it, it insulted Singer’s intelligence and dignity by saying Kleinfeld’s ouster had solved everything even though he was a truly great and irreplaceable CEO, and maybe Elliott should just stop its temper-tantrum.
The activist investor - in an unprecedented move - even mailed thousands of mini-player devices to retail investors each with one short four-minute video explaining the activist's position at a targeted company….
Sending videos to retail investors is a particularly aggressive tactic, and one that is likely extremely expensive, both due to the cost of the devices as well as the expense of distributing them. However, one proxy solicitor familiar with the situation said the tactic may be effective because retail investors have a short attention span and often don't want to read lengthy letters issued by both sides in the battle. A video like this seeks to stimulate retail support, he said.
Retail investors make up about 30% of Arconic’s shareholder base, and they don’t tend to care what Glass Lewis has to say about things. Singer’s betting they will like having a YouTube video dropped in their mailboxes, however, and if that doesn’t work, who knows what new and expensive lengths he’ll go to in order to win their support.
Paul Singer’s Activist Fund is Sending Video Players To Thousands of Arconic Shareholders [TheStreet]
Elliott Management Corporation Welcomes Glass Lewis Support for All Four Independent Shareholder Nominees [press release]