Stocks rose sharply on Thursday after the Federal Reserve hinted at possible interest rate cuts as soon as next month.US Marketsread more
The billionaire investor believes the stock market is in a "zone of fair value" at current levels.Marketsread more
The Federal Reserve may be on its way to delivering a half-point interest rate cut next month, according to Goldman Sachs economists.Economyread more
However, Slack chief Stewart Butterfield says, "The broader world of email will stick around."Technologyread more
Crude oil prices jump on news of the attack, which Iran says happened over its territory.World Politicsread more
Apple is considering moving some production from China as it is expected release of its new iPhone line this fall, The Wall Street Journal reported.Technologyread more
Workplace messaging firm Slack is about to go public in a red-hot IPO market, but it's approach to going public--using a "direct listing"--is slightly different than an IPO.Trader Talk with Bob Pisaniread more
The yield on the benchmark 10-year Treasury note fell below 2% for the first time since November 2016 on Wednesday.Bondsread more
National Securities' Art Hogan sees the U.S.-China trade war as the market's biggest risk – not Fed policy.Trading Nationread more
The Philadelphia Federal Reserve's manufacturing gauge tumbled this month, solidifying the Fed's case for easier monetary policy.Economyread more
Declining traffic to Olive Garden, Darden's top restaurant chain, resulted in weaker-than-expected revenue for its fiscal fourth quarter.Restaurantsread more
Activist hedge funds have big companies on their drawing boards, and so far, it's been the year of the "super campaign."
These funds buy up big chunks of a company's stock and use their ownership to influence management and boards to cut costs, find merger partners or return money to shareholders.
Through the first half of the year, there was a 66 percent spike in the number of activist campaigns targeting companies with market values of $10 billion or more, according to ActivistMonitor, a division of the research firm Acuris. The firm deemed this year the return of the "super campaign" in a recent report. This is even as the overall number of new activist campaigns, 100, was 13 percent less than the first half of 2016.
Companies caught up in the activism so far this year include some of America's most recognizable brands, such as Procter & Gamble, General Motors, Tiffany and Whole Foods, and funds run by some of Wall Street's most prominent investors, like Nelson Peltz of Trian Partners and Barry Rosenstein of Jana Partners.
The number of campaigns begun at companies with market values greater than $5 billion also jumped 70 percent. While in deal terms the numbers are small—there were 10 campaigns at the biggest companies and another 17 at the $5 billion and up group. But the investors have shifted their focus slightly away from smaller companies. There were 67 campaigns at companies with market values of $300 million and up, compared to 70 in the first half of 2016.
The biggest grievance — reflected in 36 percent of the activist demands — was related to a company's board composition, Acuris said.
Other popular demands included changes to a company's governance (22.6 percent ) and cost cutting (14.5 percent and the fastest growing category).
Some 12 percent of campaigns, such as the one Jana began in the spring with Whole Foods, were aimed at strategic changes. In June, the grocery chain agreed to sell itself to e-commerce giant Amazon.com for $13.7 billion, and Jana sold its 26 million Whole Foods shares shortly after that announcement for a $300 million profit.
Trian took a $3.5 billion stake in Procter & Gamble earlier this year and in July announced it was trying to get a seat on the board for Peltz so he could push for changes that could boost sales. The maker of everything from Bounty paper towels to Gillette razors and Pampers diapers has scheduled its shareholder meeting for October.
Activists were particularly focused on the consumer and leisure sectors in the first half of this year, with a 66 percent increase in campaigns targeting these companies. Hedge fund Engaged Capital disclosed a 9.9 percent stake in Hain Celestial in June, pushing a slate of seven candidates for the beverage maker's eight-person board. The fund Ancora Capital pressured the sandwich chain Potbelly Corp. to change its strategy or find a buyer.
Not every campaign has resulted in success from the activist's point of view. After David Einhorn's Greenlight Capital battled with General Motors to split shares into two classes and nominate directors to the board, shareholders of the automaker overwhelmingly rejected his plan in June.
Acuris data reveal a significant decline in settlements between activists and companies this year. There were 40 in total, a decline of 53 percent from the first half of last year, reflecting a trend of boards moving more proactively and activists not willing to step away from a fight, the research firm said.
The fund with the most campaigns through June was Paul Singer's Elliott Associates, which engaged with the healthcare services companies Advisory Board and AthenaHealth and the aluminum giant Arconic as well as three other companies. Acuris said. Jana was second with four campaigns, including Whole Foods, Tiffany and Blackhawk Network.
Mick McGuire's Marcato Capital was third busiest, with four campaigns, including one at Buffalo Wild Wings, where it won a bitter proxy fight.