Author Topic: New Yorker article on Paul Singer -Elliott  (Read 6352 times)

thowed

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Re: New Yorker article on Paul Singer -Elliott
« Reply #10 on: August 22, 2018, 02:16:33 PM »
Thanks for this, Writser.

I like the Matt Levine quote.  But just because I don't have sympathy for Bush (from one article I've read), it doesn't mean I have to agree with what Elliott does.

I'm attaching the 2017 Fundsmith Annual letter, which has a pretty decent, no-bullshit, opinion on Activism (pages 10-16).

Extract (the rest is more detailed/subtle than this):

On the whole we are not fans of activism. Too often it seems to follow a playbook that has the following steps:
1. The activist ‘buys’ a stake in a company. I have put ‘buys’ in inverted commas because often much or all of the stake is held through derivative products which means that the activist can announce a seemingly large position in the company’s stock whilst risking and committing relatively little actual cash. This methodology also gives some clue as to the activist’s time horizon which may not coincide with ours, as derivatives have an expiry date whereas stocks don’t.
2. Engage in a public row with the target company and seek board representation, a spin-off of part of the business, a merger with or sale to a competitor, raise debt to execute a share buyback (the activist can helpfully tender stock to
assist with this) etc.
3. If the company responds by following the activist’s demands they then sell their stake.
4. We and other long term shareholders are left with a company that has incurred fees and diverted time from running the business to respond to the activist and execute the changes, which is now potentially more fragmented, more highly
leveraged and has had to install new management.
5. Rinse and repeat with another victim/investment.

The whole 'shareholders are all that matters' is a subjective issue, but personally I believe it's appropriate to consider other stakeholders (e.g. treating employees right) as a) a positive contribution to our society, but also b) it makes everyone work better, which should make for better long-term profits.


Gregmal

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Re: New Yorker article on Paul Singer -Elliott
« Reply #11 on: August 30, 2018, 11:22:17 AM »
https://nypost.com/2018/08/29/paul-singers-hedge-fund-values-sky-at-more-than-34b/


LOL he's at it again. And then tomorrow he'll agree to take less...This guy is so predictable.

cherzeca

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Re: New Yorker article on Paul Singer -Elliott
« Reply #12 on: August 30, 2018, 12:06:49 PM »
singer is brilliant and deserves his stellar investment rep. 

as for blackmail, if the CEO is an issue then all is fair...just like prosecutors that go after high level crimes and find that tax evasion is the most prosecutable, if a CEO is a bad manager but is most attackable based upon personal conduct, then the CEO is just showing you the way to get rid of him/her.  suddenly it is Elliot's fault?

LongHaul

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Re: New Yorker article on Paul Singer -Elliott
« Reply #13 on: August 30, 2018, 08:25:53 PM »
I find certain tactics and actions very distasteful. Here is some more stunts.

My understanding is retail bond investors claim they lost a lot of value in the Peabody bankruptcy case when the big funds Elliott, etc did not give retail holders the option of participating in a deal at a low valuation.

Same thing was tried at Breitburn but the judge rejected it. 

https://www.reuters.com/article/us-breitburn-energy-bankruptcy/breitburn-energy-bankruptcy-plan-denied-in-blow-to-elliott-wl-ross-idUSKCN1GL27X


Forensic Accounting Consulting on public companies. Private Message me if interested.  This can be a good way to avoid blowups.

Gregmal

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Re: New Yorker article on Paul Singer -Elliott
« Reply #14 on: September 17, 2018, 07:26:18 PM »
https://nypost.com/2018/09/17/paul-singers-hedge-fund-backs-away-from-athenahealth-deal/

He's back at it again with the antics. I feel like if you gave any half competent person $10B+ they could do what Elliot does. Basically just trash companies/board, litigate, and play poker trying to force sales.

Spekulatius

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Re: New Yorker article on Paul Singer -Elliott
« Reply #15 on: September 18, 2018, 04:05:19 AM »
https://nypost.com/2018/09/17/paul-singers-hedge-fund-backs-away-from-athenahealth-deal/

He's back at it again with the antics. I feel like if you gave any half competent person $10B+ they could do what Elliot does. Basically just trash companies/board, litigate, and play poker trying to force sales.

This makes vet greatly undermines his credibility’s. Then there is Telecom Italia (which I own as well, but at lower prices than his entry I think) which is looking sickly and where his tactic seems ineffective.
To be a realist, one has to believe in miracles.

JayGatsby

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Re: New Yorker article on Paul Singer -Elliott
« Reply #16 on: September 18, 2018, 11:55:00 AM »
I kind of agree with what Matt Levine posted on Twitter:

Quote
i am not sure why i am supposed to sympathize with a millionaire Bush cousin/medical-billing CEO who is hurt that people criticized him for drinking too much, sailing too much, and repeatedly punching his wife in front of their baby?

I’d say on average activism is a good check on management. However, there are some problems associated with it (short-termism, maybe too much focus on cost cutting?). Also, it looks like Elliott is “walking the line” in terms of what is acceptable behavior.

The Elliot activism looks like blackmail to me. They don’t win by arguments, they win by blackmailing and discrediting people. It’s a pretty lowlife way of making a living. Also potential harmful for him and his employers, friends or family, if he ever gets into issues with the wrong people who pay back in his own currency and up it a notch.
I agree. The private investigator stuff is crossing the line in my opinion, particularly as it sometimes relates to people's families. It's a fine line... if you think a CEO isn't 100% engaged in the company that's fair game, but they always seem to take it too far. Using private investigators to threaten people with sensitive personal information seems borderline illegal, but I don't know the laws on such things. I'm not sure any Detroit automaker would actually be offended that someone in their circle drives an Aston Martin. That's a different breed of cars than Detroit makes.

Their developing economy debt antics are pretty devastating to the citizens of those countries. I agree the countries shouldn't be financing themselves off of debt, but that's how the system works.

Cardboard

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Re: New Yorker article on Paul Singer -Elliott
« Reply #17 on: September 18, 2018, 01:30:15 PM »
Well, I am quite happy that "jerks" such as Paul Singer exist and wish that Canada had way more of these.

The amount of greed, corporate abuse, that goes on by so many executives is unbeliveable. They hide behind protective boards, have corporate funds available to hire the best lawyers. Many of them ruin people's lives who have put their hard earned savings into their firm. However, you will almost never see them take a pay cut, lose their severances, etc.

So yes, they deserve to be exposed or like any politician. I would tend to believe that the number of executives getting caught with their pants down and doing a great job for shareholders must be minuscule.

Cardboard 

Spekulatius

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Re: New Yorker article on Paul Singer -Elliott
« Reply #18 on: September 18, 2018, 06:10:59 PM »
Well, I am quite happy that "jerks" such as Paul Singer exist and wish that Canada had way more of these.

The amount of greed, corporate abuse, that goes on by so many executives is unbeliveable. They hide behind protective boards, have corporate funds available to hire the best lawyers. Many of them ruin people's lives who have put their hard earned savings into their firm. However, you will almost never see them take a pay cut, lose their severances, etc.

So yes, they deserve to be exposed or like any politician. I would tend to believe that the number of executives getting caught with their pants down and doing a great job for shareholders must be minuscule.

Cardboard

The question is if the shareholders will do any better with the  hedge fund activist investors in control. companies like Sears, JCP, VRX suggest otherwise. At least Elliot has a track record so far but many people there have not.
To be a realist, one has to believe in miracles.

JayGatsby

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Re: New Yorker article on Paul Singer -Elliott
« Reply #19 on: September 19, 2018, 09:44:03 PM »
Poor governance will be apparent without a private investigator. Using personal dirt to achieve their objectives is a tactic fairly unique to Elliott. I'm sure others do it, but I haven't seen it. Even Ackman didn't do that. Elliott always denies it, but the same stuff pops up in each of their campaigns. I agree with activism as being overall good for shareholders, but I don't agree with some of Elliott's tactics.