Kickstarting the debate: “Why Carl Icahn is bad for investors”
Cue fisk:
In my opinion, the article was so wrongheaded that I am surprised that it was afforded an appearance in a premier business newspaper. - C.C. Icahn.
Well Carl, this premier business newspaper… “the friend of the Honest Financier and the Respectable Broker” is giving you the opportunity to air your views. Not quite the op-ed page, but all the same…
From the Icahn Report “A lot of people die fighting tyranny. The least I can do is vote against it”
It is a sad fact that many of the professionals that consider the influence of activist investors seem to adopt the views of PR firms which are paid by corporations with shareholder dollars to mislead and obfuscate the truth. Addressing the real problems facing corporate America will require a thorough understanding of the relevant business dynamics and cannot be solved by fingerpointing or hyperbole.
And some of those from your supporters. 24/7 Wall Street:
Here’s why activist investors are good: unlike executives who earn salaries and bonuses — and hunting and fishing trips — completely independent of the return given to shareholders (Ask Bob Nardelli for more details on this), activist investors profit only when other shareholders do too. If they push for a sale to a private equity firm, it’s at a premium to the current market price. Activist investors may be short-term oriented but the long-term is essentially the accumulated result of many short-terms. At most companies where activist investors get involved, the current management team has a track record of long-term value destruction. Shares of Yahoo! (YHOO) are trading at a 4-year low — how much more time does the current team need to execute its long-term strategy? Icahn has also, in many cases, stayed with companies for longer periods — he’s been on Blockbuster’s (BBI) board of directors for three years, and was an investor in the company before that.
See also - Why Jerry Yang is bad for investors.
Related links
Icahn’s hedge funds said to take a hit - DealBook
On activist investors - FT
