This week, WSJ’s Lauren Thomas reports that entrepreneur turned activist Ryan Cohen, otherwise known as the “meme-stock king” partly responsible for the GameStop stock rally in 2021 that inspired a legion of retail investors, has set his sights on Chinese e-commerce giant Alibaba. In a rare case of activism targeting a Chinese company, Cohen is calling for an increase in share buybacks and predicts the company could achieve double-digit sales over the next five years. Many are skeptical about his chances of success given China’s significant influence over its companies – Bloomberg’s Katie Roof noted that just this month, a government entity took “golden shares” in an Alibaba entity, which allows the government to nominate directors or sway important company decisions and ensure longer-term control over the sector.
In other activism news, on Tuesday, Emerson Electric engineered a $7 billion hostile takeover bid to acquire National Instruments. Unusual timing for a hostile bid, since just last week National Instruments announced that the company was for sale and simultaneously adopted a poison pill. Bloomberg’s Ed Hammond describes Emerson’s offer as “turning up to a house viewing and kicking in the front door.” National Instruments might need to change its locks as Emerson turned up the heat by launching a website and signaling its intent to nominate directors.
The deal market was a topic of conversation over Swiss wine and fondue this week at Davos, the first WEF since this time three years ago. Goldman Sachs CEO and part-time DJ David Solomon and KPMG CEO Paul Knopp were among those who were cautiously optimistic about a rebound in dealmaking in 2023. Solomon told CNBC’s Becky Quick, Andrew Ross Sorkin and Joe Kernen he thinks there will be more capital markets activity this year once dealmakers are able to wrap their heads around price points, while Knopp explained to Yahoo! Finance’s Brian Sozzi and Julie Hyman why he sees a “pretty strong resurrection” for deals coming in the back half of the year.
Over at the Magic Kingdom, Financial Times’ Anna Nicolaou and Ortenca Aliaj highlight how Disney struck back at Nelson Peltz earlier this week by filing its preliminary proxy and accompanying slides that detailed why the Mouse House believes Peltz isn’t fit to serve on the Board.
Finally, advisory and asset management firm Lazard released its annual year in review for shareholder activism and 2022 did not disappoint. Last year’s 235 executed campaigns reached levels not seen since 2018. The report found a 36% increase in activism activity year over year, while the final quarter of 2022 was the busiest quarter on record for activist funds. With a record breaking year in the books for 2022, one can’t help but wonder what 2023 has in store.
Have a great weekend,