Loeb Ratchets Up Campaign Against Sotheby’s Board

With the May 6 election D-day approaching for Daniel Loeb in his fight proxy fight with Sotheby’s, the activist hedge fund manager called Sothebys (NYSE:BID) recent attack against him “false” and “misleading” while fighting for votes.

Latest campaign literature presents few new facts

Loeb 4 15 luxury consumption

Coming off a stinging loss in a proxy battle with moms at his luxury Manhattan condominium building, Loeb was taking swings at the staid grand dame of the auction business.  In the latest volley in a “he said, she said” political campaign, Third Point released a 30 page presentation that outlines Loeb’s essential arguments – much of which is re-iteration that can be found in the fund’s previously slick media presentations. The presentation directly attacked standing board members Robert Taubman, Daniel Meyer and Jessica Bibliowicz, saying they have “limited qualifications” and likely won’t “add value for Sothebys (NYSE:BID) shareholders.”

“Management’s claim that 2013 was a ‘record’ year is misleading and demonstrates the risk of having a Board asleep at the switch,” Loeb wrote, as he pointed to statistics that can be found on his web site.

Loeb 4 15 luxury art share

Loeb answers Sotheby’s attacks on his credentials

In a previous filing with the Securities and Exchange Commission, Sothebys (NYSE:BID) had questioned Loeb’s credentials and ability to add value to the auction house’s board.  In Loeb’s response, he says Sothebys made “gross misstatements regarding Mr. Loeb’s expertise in art and digital media,” noting accolades Loeb has received for his art collection.

Loeb 4 15 luxury losing share

The presentation also said Sothebys (NYSE:BID) criticism of Loeb’s involvement in Yahoo was “disingenuous.”  Comparisons have been made between Loeb’s campaign against Sotheby’s and their battle over Yahoo! Inc. (NASDAQ:YHOO), where Loeb’s activism was said to be the catalyst that brought Marissa Mayer in to replace former CEO Scott Thompson.  In the current campaign, however, the glitz and volume of political campaign literature is more extensive, leaving one to wonder where the campaign tactics of activist hedge funds will explore next.  Will we see Daniel Loeb shaking hands at train stations in Greenwich, CT?




About the Author

Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com