What’s New In Activism – Twitter Wants Support For Musk Deal
Twitter Inc (NYSE:TWTR) wrote to its shareholders urging them to support its proposed merger agreement with Elon Musk at its upcoming special meeting.
On July 14, Twitter filed a preliminary proxy statement for a special meeting for shareholders to vote on the merger, valued at $44 billion, but has yet to set a time or date.
The deal, which stands to net shareholders a 38% premium on their shares, is in jeopardy after Musk notified the social media platform that he would be terminating the agreement.
Q2 2022 hedge fund letters, conferences and more
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Twitter said that Musk’s purported termination is "invalid and wrongful," sued Musk in the Delaware Court of Chancery, and warned shareholders the price of the company’s stock may "decline significantly" if the deal is not completed.
Activism chart of the week
So far this year (as of July 15, 2022), globally, 116 companies have been publicly subjected to environmental-related activist demands. That is compared to 63 in the same period last year.
Source: Insightia | Activism
What’s New In Proxy Voting - Meta Human Rights Report
Meta Platforms Inc (NASDAQ:META) released its first annual human rights report, detailing how the technology giant addresses potential human rights concerns, after sustained pressure from investors to enhance its reporting.
In the July 14 announcement, Meta disclosed information on due diligence it performed in relation to COVID-19 and explained its human rights principles, health misinformation policies, and bullying and harassment policies.
Investors have long pushed for enhanced human rights reporting at Meta, with proposals seeking a human rights impact assessment, disclosure on community standards enforcement, and reporting on its dedicated risk committee winning 23.8%, 19.2%, and 10.5% support, respectively, at Meta's May 24 annual meeting. Votes are mostly controlled by insiders at Meta, so shareholder proposals rarely receive majority support.
More broadly, 15 shareholder proposals seeking human rights reporting have won 33.7% average support at U.S.-listed companies this year.
Voting chart of the week
In the 12 months to June 30, 2022, there were 93 shareholder proposals at Canadian companies. This is up from 84 in the previous 12-month period.
Source: Insightia | Voting
What’s New In Activist Shorts - Muddy Waters Report Attacked
Recent short target Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI) accused Muddy Waters of putting out a report filled with "factual errors and inflammatory and misleading statements."
Muddy Waters alleged on July 12 that the company was inflating earnings through questionable accounting practices and claimed that most of the company's income is both non-cash and "unrealizable."
In a rebuttal the next day, Hannon Armstrong slammed Muddy Waters' work as "fallacious" and said its accounting was "fully compliant" with international and U.S. regulations and presented an "accurate" image of its performance.
Muddy Waters had argued that Hannon Armstrong's financial records were unreliable because of their complexity, but the company said this opinion stemmed from the short outfit's "fundamental lack of understanding" of the statements and its business.
Shorts chart of the week
So far this year (as of July 15, 2022), three real estate companies have been publicly targeted by an activist short campaign. That is up from none in the same period last year.
Source: Insightia | Shorts
Quote Of The Week
This week's quote comes from Bonitas Research's July 14 report as it accused insiders at Alphatec Holdings of colluding with undisclosed related-party distributors to artificially inflate the medical technology company's revenue. Read our reporting here.
“Fake sales resulted in fake costs of goods sold which are reflected as fake inventories.” – Bonitas Research
