When activist investors take a major stake in a company, the intent is to shake things up. Usually through specialized hedge funds, they flex their shareholder position to advocate for everything from firing CEOs to changing the focus of the business. Here are companies in the throes of activist investors in this week’s Five for Friday:
#5: Twitter
Twitter has been at the mercy of the world’s wealthiest person Elon Musk ever since he took a 9.2% stake in the social media giant in March. The SpaceX and Tesla CEO tried to alter the company’s direction through conversations with founder Jack Dorsey and was offered a seat on the board, but in the end he decided to use his billions to buy Twitter outright. Musk is now trying to back out of the $44 billion deal over the number of bots on the platform, but shareholders approved the deal. The two sides are now locked in litigation.
#4: The New York Times
In August, The New York Times became the target of ValueAct, a hedge fund with a portfolio worth more than $6 billion. In the past, ValueAct has taken significant positions in media companies like Reuters and 21st Century Fox. It’s demanding the newspaper aggressively push bundled subscriptions – that includes games, cooking, Wirecutter and The Athletic – to maximize profitability. The Times may need it too, its stock is down more than 30% so far this year.
#3: Chevron
An outspoken critic of environmental, social and governance investing, Vivek Ramaswamy took a stake in Chevron. He wrote a letter to the oil giant saying he wanted, “to liberate you from constraints imposed on Chevron by its ESG-promoting ‘shareholders.’” Ramaswamy is effectively calling on Chevron to pump more oil following oil companies facing pressure from shareholders to transition away from fossil fuels.
#2: Bed Bath & Beyond
Ryan Cohen, most known for co-founding Chewy and serving as chairman of Gamestop, bought up more than 7 million shares in Bed Bath & Beyond earlier this year. The man who has become an idol to meme stock investors dumped his 12% stake in the company in mid-August. The sale tanked the stock more than 40% in a single day, but Cohen walked away with $68 million in profit.
#1: Disney
It’s not easy for companies to come out of a tussle with an activist investor unscathed. Disney may be an outlier after defeating a challenge from hedge fund manager Dan Loeb, who tried to force the house of mouse to spin off ESPN. In the end, he said he was able to get a better understanding of ESPN’s business model and backed off. Disney isn’t out of the woods yet, though, as Loeb still has other demands.
