Loeb Wins Key Ally In Sotheby’s Battle


Daniel Loeb may have won a contested endorsement in his bid to shake up the staid Sotheby’s (NYSE:BID) board of directors after launching a well-defined marketing campaign.

Institutional Shareholder Services backs Loeb after Sotheby’s courted them

The well-regarded proxy advisor Institutional Shareholder Services, utilized by small and mid-sized institutional investors, said on Thursday that it was backing the Loeb bid after being actively courted by Sotheby’s (NYSE:BID).  “The dissidents have laid out a series of broad questions they believe the board is not, but should begin, taking up,” the ISS report said.  “There is credible reason to believe their larger criticism about strategic myopia has some credibility.”

“Old master painting in need of renovation”

Loeb had labeled Sotheby’s (NYSE:BID) lackluster performance as due to “strategic myopia,” saying the company is “an old master painting in desperate need of renovation.”

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To combat the influence of the ISS report, Sotheby’s released select preliminary figures from its first-quarter earnings on Wednesday night – nearly two weeks before they were due, a report in the Financial Times said.

Shares of Sothebys are nearly 4% higher on the news as Sotheby’s (NYSE:BID) released a statement.  “Now is not the time to diverge from Sotheby’s leadership and its strategic plan. We believe that replacing any of Sotheby’s director nominees with Mr Loeb or any of his handpicked nominees could negatively impact shareholder value.”

Direct marketing campaign showing results

The marketing campaign to win the hearts and minds of Sotheby’s (NYSE:BID) shareholders dove into apparently successful attacks by Loeb on sitting Sotheby’s board members, as reported in ValueWalk. In a letter to Sotheby’s shareholders, Loeb had criticized each of the board members, few if any of whom own stock in Sotheby’s, Loeb emphasizes. Loeb had also built a web site and issued a PowerPoint presentation in an effort to sway investors.

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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

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