Activist investors like Carl Icahn destroying companies, costing jobs, says corporate attorney

“Activist shareholders are destroying companies and causing widespread job losses even at firms that aren’t directly targeted, according to leading U.S. corporate lawyer Martin Lipton,” Janet Mcfarland reports for The Globe and Mail.

“Mr. Lipton told an Ontario Securities Commission conference Tuesday that shareholders are becoming too powerful a force in the corporate world, especially some of the most prominent hedge fund activist investors like Carl Icahn and Bill Ackman,” Mcfarland reports. “Even worse, he said the far larger majority of companies that are not directly targeted by activists are now adopting policies to deter takeovers by cutting costs, reducing spending on research and development and laying off employees to improve short-term profitability.”

Mcfarland reports, “But OSC vice-chairman Jim Turner told the panel there is also evidence activist hedge funds have also created value, saying shares of Canadian Pacific has soared since Mr. Ackman’s Pershing Square bought a stake in the company and replaced the CEO.”

Read more in the full article here.

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30 Comments

  1. This is absolutely no surprise at all.

    “research shows 60 per cent of companies targeted by activists disappear within 2.5 years.”

    Let’s hope that Tim Cook reads this.

        1. The difference between a predator and a parasite is only the strategy employed to kill its prey. Both are to be respected in nature and to be abhorred in human interaction.

  2. No, shareholders are not getting involved too much. Quite the contrary, shareholders are not involved enough. Most corporate boards pay little if any attention to shareholders until enough public attention is brought forth. Carl Icahn is not a typical shareholder. He is not an advocate for the shareholder. He is a scumbag. He makes Eric Schmidt look like a princess fairy. Hopefully Tim Cook and the gang in Cupertino will figure out a way to trip Carl as he goes out the door.

  3. You know, TCGF, you clearly obsess too much about gays, that’s what happens with people in the closet. This was just your way of expressing publicly what you dare not say any other way. Poor sod. Other than that, your post is pretty worthless.

  4. Carl Icahn caused me to be laid off the first time in my life, back in 1986 when he bought out the company I worked for. Looks like he spent his whole life putting American citizens out of work. Nice job and clearly a hero for the republican party.

    1. I think if you use you brain (and do a little reading) you will find that people like ican and sorros are clearly not heros of the republican party.
      Actually you might want to study up on just who it was that leveraged him in at TWA. (and the circumstances surrounding that takeover)
      Go ahead do a little reading and thinking, I promise it won’t hurt.

      1. Oh, so you wanna play Your Billionaire is Worse Than My Billionaire? Ok, I see your Icahn & Sorrors and raise you two Koch brothers, Sheldon Adelson and Rupert Murdoch. Fold?

        1. You are obfuscating, all I said was if you think Carl Ichan is “clearly a hero for the republican party” you are very mistaken and need to do a bit of reading.

          I hope you did actually read something about the TWA takeover and exactly who carl ichan is and who helped him to power. (but given your response I am skeptical)

          However I’m not going to debate your newly expanded list because it appears, arguing with you would be like playing chess with a pigeon. You’re going to shit on the board, knock over all the pieces, and strut around victorious.

        2. I think we can all agree that being a billionaire makes someone a lot more likely to be a terrible person, regardless of which political party and philosophy they pick. In fact, science says so: http://www.pnas.org/content/early/2012/02/21/1118373109

          I think that politically-right sociopath-billionaires tend to stomp all over the poor (and to them that means anyone who isn’t at least a millionaire), while politically-left sociopath-biollionaires tend to believe they need to control every aspect of poor people’s lives since clearly being poor means you are stupid and incompetent. No freedom for the unwashed masses, the only question is whether it will be an evil corporation taking over and polluting all property and robbing people, or an oppressive government that loves to control every aspect of our lives.
          I think historians would agree, as well.
          So, the question is: are you willing to so blindly adhere to your political philosophy that you allow the sociopath-billionaires to use it as a distraction from how they are stripping away your freedoms and destroying everything, or are you ready to start reigning them in, whichever side of the R/D line (in USA) they fall on?

          1. Are you really that naive?
            You initially set forth a (you claim forgone) conclusion that money makes someone a terrible person? Based on a NAS article?
            You can’t think of reason the NAS might publish biased articles?

            Wow if this represent the quality of thinking of todays youth then we -are- lost.

  5. Carl Ican is only interested in MAKING MONEY FOR HIMSELF.
    He doesn’t care what happens after he has sold his stock. Meaning that if the company goes bust he couldn’t care LESS.
    He does not run companies he raids the companies worth and then runs for the hills.

    1. Absolutely, except running for the hills part,
      He is a parasite. He sucks companies dry, takes the profits and laughs all the way to the bank.

      That people think this is the same as what Mitt Romney did at Bain is a testament to their ignorance (and the likely reason that we are where we are now)

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