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Elon Musk blazes trail for new-model investor activism

Shareholder activity is on the rise. And guess what? Elon Musk – a vocal supporter of electric cars, gas-consuming rockets and many other contradictions – is her new hero.

Of Musk A proposal that has been much discussed For Twitter, the social media platform he used for all his election statements, has replaced for a short time what seemed like a more normal activist investment in line with the world’s elites and icons. On April 4 it was Exposed That the brilliant entrepreneur has become Twitter’s largest shareholder, with 9% of the shares. Within a few days he was offered, and given, a seat on the board with an alleged mission to play the role of an outsider.

Traditional patterns, of course, are not for musk. And as befits an iconoclast rushed, he soon changed his mind, and decided not to join the board anyway, instead accumulating the financial backing to launch a full $ 43 billion bid for Twitter. There is a deal Now doneAlthough how the story ends is someone’s guess, given the uncertainty about the solidity of financing and the history of Musk’s clashes with regulators, particularly the Securities and Exchange Commission, which has jurisdiction over acquisitions.

But the case highlighted with a unique musk radiation that low-performance companies are exposed to such or other activists (the share price of Twitter in March fell more than 50% from its 12-month high).

As economic pressures, rising inflation and rising interest rates threaten stock market estimates, there is an additional incentive for investors to intervene more in an effort to overcome a potential downward trend in average stock prices.

At the same time, another motivation is running: mainstream active investors are becoming more activist, as they finally feel the pressure to differentiate between their performance and cheap index-linked passive funds. Recently, a number of groups, such as that of the United Kingdom Aberdeen, Tried to push the prestigious market to higher models of funds with higher performance.

Undoubtedly, in the first three months of the year, 73 active campaigns were launched worldwide, a quarterly record by New review By Lazar. In Europe, where stock markets were much less frothy than in the US, activists’ search for low-valued investments was particularly enthusiastic. 15 new campaigns were launched in the first quarter, a 50% increase over the previous year.

This partly reflects the growing willingness of established names to take vocal positions against company managements on specific issues. Aberdeen Was between Woodphone activists, for example, have joined a Cvian-based campaign demanding a drastic structural change and a conference room renovation.

There was even activism from the sovereign wealth fund community, traditionally a rarity. Tamsk last month is Reporting Pushed Bayer CEO Werner Bauman to leave the German health group.

Another trend, prominent in Italy, has seen local rivalry – equal to the move in a sense, but clearly driven now by debates over low stock market performance. In Generali, this week’s annual meeting will witness a confrontation between the Italian insurance company’s board with the support of the leading investor from Diobank and a group of rival shareholders led by business tycoons Leonardo del Vecchio and Francesco Caltagirona. Both sides maneuvered to maximize the weight of their stock holdings – Following a pattern More related to activist hedge funds.

Activist campaigns have also been particularly affected by the ESG agenda, with activists pushing companies to adopt more advanced environmental, social and governance policies. Carl Ikhan, for example, has focused McDonalds on how its suppliers treat pigs. The hedge funds Snowcap and Clearway pushed, respectively, to stay away from coal and exit Russia, in the energy groups AGL and Total.

Lazard data show that the number of annual meeting proposals related to environmental and social issues in the first quarter of the year (438) almost equaled the record number for an entire year recorded last year.

Campaigns pushing for a merger or acquisition have dropped (from an average of 41 percent in the last four years) to just 30 percent, with the replacement of the board now the target in 40 percent of cases, compared to 31 percent. As usual, then, in his assimilation program for Twitter, and in the postponement of a board meeting, Elon Musk is fighting against the current.

patrick.jenkins@ft.com

Elon Musk blazes trail for new-model investor activism Source link Elon Musk blazes trail for new-model investor activism

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