What the activism world is talking about

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Going into the last week of its proxy contest with Procter & Gamble, Trian Partners is now armed with support from the three proxy voting advisers – ISS, Glass Lewis, and Egan-Jones. Will it make all the difference? Recent history is replete with examples of management triumphing against the odds, including Taubman Centers and Innoviva (more or less controlled companies) this year, and in 2016, FBR & Co and iRobot. Institutional investors increasingly argue that they do not follow proxy advisers and have their own processes, with some justification. Worldwide, BlackRock and Vanguard voted the same way as ISS in proxy contests 64% and 61% of the time respectively, according to Proxy Insight data going back to 2013. So, there is plenty of room for a surprise. Perhaps the closest comparison, given P&G’s less predictable retail component, is DuPont, where Trian was defeated despite the support of all three proxy advisers.

Health Insurance Innovations

Short update

Logic dictates that an anonymous short report containing little in the way of new information just over two weeks after a respected short seller published his views on a company should have a limited impact. Yet that was not the case for Health Insurance Innovations (HII), which The Friendly Bear hit last week with a report that caused a 24% fall in the share price in just one day. Coming on top of Richard Pearson’s allegations that the company might see regulatory suspensions in 42 states, the stock fell 60% over September. HII issued a press release on Wednesday with endorsements from three U.S. politicians and statements that its exposure to the prospect of regulatory interference in Montana was “no longer material” and that it had a “general understanding” with Florida regulators about an application for a third-party insurance administrator (TPA) license.

Article by Activist Insight