What the activism world is talking about

Tuesday Morning, an off-price retailer being led by a former activist, surged yesterday on reports that the hunter had become the hunted. Shares rose nearly 10% on demands by Jeereddi Partners and Purple Mountain Capital Partners that the company replace Steven Becker, formerly of Becker Drapkin Management (now Northern Right Capital Management) with Michael Barnes, former CEO of Signet Jewelers. Watching the company’s response will be illuminating – how does an activist lead an anti-activist campaign? To start with, Becker chided his opponents for the “small number of shares” the two firms own and criticized their timing, saying the fight would be a distraction from peak season. Then he promised the board would back management to the hilt. “We have a strong relationship with our current shareholders and we believe that we will successfully defeat this attempt to disrupt our board and cause a distraction,” he told employees.

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Short update

Pershing Square Capital Management CEO Bill Ackman responded to criticism of Chipotle Mexican Grill’s new queso dip in a CNBC interview by saying, “I'm beginning to believe that Twitter is filled with a bunch of Chipotle short-sellers.” In fact, despite falling more than 20% since Pershing Square’s investment, the stock is surprisingly free of activist short sellers at least. Still, a year into Ackman’s crusade to bring burritos to the masses, Chipotle has revealed little of the productivity improvements that the activist promised. There has been little disclosure around its pickup kiosks, touted to have reduced wait times in a February press release. Earlier this month, the company announced its first ever restaurant had reopened following a renovation – the first in 24 years. Chipotle longs will hope for faster progress at other stores.

Article by Activist Insight