Breakup Value

Finance allah shmoop what is activist investing Welshman gigi foot

massagers has been around forever great grandpappy elmo spanish for

the mo sold them to the u s army after

long marches through the r den in the first world

war Teo you know end all wars The soldiers then

bought them when they got home and consumers followed suit

with company was so successful that it didn't need to

be all that efficiently run It went public in nineteen

sixty five and was a good stock for a while

Then in the early nineteen nineties the company didn't adapt

to the new world of internet distribution and robot manufacturer

so the stock languished It remained the same price in

nineteen ninety five that it was some two plus decades

later Well during that same period the overall stock market

went up almost five hundred percent and shmoop gigi's primary

competitors P eta terrible went up eight hundred percent stealing

loads of market share from schmidt ge whose product was

now ah define a ble inferior Well since this company

was public and largely now owned by the public the

public had the right to have a say in how

the company was managed Endless angry letters were sent to

the ceo elmo the fourth jr a direct descendant of

happy elmo the founder Those letters were ignored more letters

followed to the board and they were ignored as well

Then finally a set of activist investors decided it was

time to step in Ironically on comfortably massage feet courtesy

of shmoop gigi well the activist investors simply coalesced all

of the common stock shares they could find you know

identifying who owned him and said hey can you vote

with us And when the next board election came where

three of the eleven director seats were to be voted

on while the activist investors elected their own slate or

group of directors who would begin to force the company

to behave more like a shareholder friendly profit seeking company

instead of ah make work project for the progeny of

pappy elmo to simply take a salary and make tens

of thousands of sore feet relatively happy In fact the

activism here was pretty common in situations like this fat

companies who didn't streamline and adapt but who still had

pretty good brand names were out there And while there's

a whole qadri of lawyers who do little other than

chase companies earning twenty cents a share when they should

be earning a dollar a share for share holders like

that's who they work for shareholders Activist investing has become

so common that it is almost an industry or investment

category or strategy unto itself now and that's A good

thing because some of those fat cos well you know 00:02:51.66 --> [endTime] they could stand to lose a pound or two