What the activism world is talking about
Weeks after a battle between the London Stock Exchange and activist investor The Children’s Investment Fund (TCI) erupted, CEO Xavier Rolet announced his resignation, effective immediately. TCI, a 5.1% shareholder, previously called a general meeting to remove Chairman Donald Brydon from his post and extend the contract for Rolet for another four years, believing that the chief executive was unjustly forced out of his position. However, on Wednesday, Rolet made clear that he will not return as chief executive “under any circumstances.”
In addition, in an attempt to mollify the activist, Chairman Donald Brydon said he will not stand for re-election. However, TCI said it is still seeking to remove Brydon under the claim that he fired Rolet without proper cause. "By refusing to properly explain the dismissal, TCI is led to believe that a personality clash with Donald Brydon was the cause," the activist said in a Monday presentation.
David Einhorn’s Greenlight had a strong fourth quarter; Gains on Neubase Therapeutics [Q4 Letter]
David Einhorn's Greenlight Capital was up 5.2% in 2020, underperforming the S&P 500's 18.4% return. For the fourth quarter, the fund was up 25%, which was its best quarterly result ever. Longs contributed 42% during the fourth quarter, while shorts detracted 15% and macro detracted 1%. Q4 2020 hedge fund letters, conferences and more Growth Read More
What we’ll be watching for this week
- Will Oceanic Capital succeed in removing two incumbent directors and appointing three dissident nominees to the board of Australian mineral explorer Argent Minerals at the company’s shareholder meeting Wednesday?
- Will Wintergreen Advisers withdraw its nomination notice and strategic review proposal at Consolidated-Tomoka now that the company has rejected the activist’s demands?
- Will Marcato Capital Management’s recently reduced slate of three directors secure a more favorable ISS recommendation regarding changes to Deckers Outdoor’s board?
Troubled company Signet Jewelers announced Friday that U.S. consumer regulator Consumer Financial Protection Bureau (CFPB) may take legal action against the company over illegal in-store "credit practices, promotions, and payment protection products." In addition, the New York Attorney General’s Office said it is investigating similar issues in its jurisdiction. Signet stated that it is cooperating with both parties, but said the claims "lack merit" and its practices are "lawful."
Short seller Marc Cohodes, who confirmed to Activist Insight that he was short the stock, said he believes the company is a disaster and its books are toxic. “It’s more decay on the tooth,” Cohodes said of the company’s recent announcement. “The tooth is already rotten.” Cohodes said the real issue is not the potential legal action, but the fact that it took Signet three months to disclose such news to its shareholders.
So far this year (as of November 28), 26% of the companies publicly targeted by an activist short seller operated in the healthcare sector, making it the most targeted sector this year thus far.
Chart of the week
Proportion of resolved demands made by primary- and partial-focused activists where the demand was at least partially satisfied.
*All figures are as of December 1 in the respective year.
Article by Activist Insight