A Greek court extended an injunction to protect short seller target Folli Follie’s assets from creditors

What the activism world is talking about

Mario Cibelli’s Marathon Partners Equity Management sent a letter to the board of cosmetics company e.l.f. Beauty last week, urging the firm to refocus on core operations or sell the company. In the letter, the activist claimed the board lacked urgency and that investment firm TPG Growth’s interests are overrepresented in the boardroom.

The activist explained that TPG’s influence is shaping the board’s agenda to benefit the investment firm at the expense of the company’s broader shareholder base. Marathon wants e.l.f. to add new board members who aren’t affiliated with TPG. The firm believes this will bring a new perspective to the boardroom on discussions regarding shareholder value.

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Q2 hedge fund letters, conference, scoops etc

The activist investor also said executive compensation is excessive in the context of the current results and poor share price performance. Marathon demanded the board cut back on executive compensation to further reduce overheads.

What we'll be watching for this week

  • Will Tartisan Nickel shareholders vote in favor of Belgravia Capital’s majority slate so that the activist investor can delist the company’s shares?
  • The second round of offers for Athenahealth started yesterday. Will the firm receive any bids that top Elliott Management’s $160 per share takeover proposal advanced earlier this year?
  • Will shareholders vote to change Macquarie Korea’s manager, as proposed by activist investor Platform Partners?

Activist shorts update

A Greek court extended an injunction to protect short seller target Folli Follie’s assets from creditors, as the jewelry company continues to face regulatory scrutiny over the accuracy of its finances. A group of creditors has been trying to get the injunction lifted to settle loans, but the company is seeking to instead reach an arrangement with them and produce a restructuring plan once the financial audit is over.

The injunction was put in place after activist short seller Quintessential Capital Management accused the company of vastly overstating the size of its Chinese business. The short seller said that the company’s business in China may be worth $50 million instead of $1 billion as it had claimed, kick-starting an independent review into the company’s finances by the Greek market watchdog.

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Chart of the week

The number of Canada-headquartered companies publicly subjected to activist demands (between January 1 and September 14 of each year).

Chart of the week shareholders vote

Article by Activist Insight

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About the Author

ActivistInsight
Since 2012, Activist Insight has provided its diverse range of clients with the most comprehensive information on activist investing worldwide. Founded by Nick Arnott and Kerry Pogue with the objective of providing unmatched intelligence to professionals in the global activist investment space, Activist Insight made its entry into the market with online information product, Activist Insight Online. Activist Insight Monthly, the world’s only monthly magazine dedicated to shareholder activism, soon followed, granting its readership access to the thoughts and opinions of key industry professionals, while providing an editorial vehicle for the data trends uniquely aggregated from Activist Insight Online. In 2013, Activist Insight’s sister business, Proxy Insight, was co-founded by Nick Dawson and Nick Arnott.