Shareholder Activism Shakes Shack, While Accused Ponzi-Schemer Carl Icahn Admits $9 Billion Loss on Wrong Way Bet on Stocks 

Call it a fast food fight. In the span of three days, activist investor Engaged Capital heated up the broiler at Danny Meyer’s Shake Shack after leaking to the Wall Street Journal that they were planning a proxy contest, and then quickly put the fight on the back burner and settled with the company to add an independent director. Engaged Capital’s short-lived campaign is another example of what the Journal’s Lauren Thomas describes as “activists laying down their arms” and looking to avoid expensive proxy contests. In this case, Shake Shack accepted one board member as opposed to the proposed three and mutually agreed to add another director with restaurant operations experience. 


On Monday, Elliott Management went back to the well and for the second time pushed for changes at Houston-based power company NRG Energy. The feeling of déjà vu is strong at NRG Energy after Elliott’s 2017 campaign to “cut costs” and “review strategic initiatives” resulted in the appointment of two new board members. This time, the activist is again calling for cost cutting, a strategic review of recently acquired security systems company Vivint, and five new board members.


Meanwhile, the troubles continue to mount for octogenarian corporate raider Carl Icahn. Opening up to FT’s Antoine Gara and Ortenca Aliaj one week after disclosing the U.S. Attorney for the Southern District is investigating his company, Icahn Enterprises LP (IEP), for governance and accounting issues, the cranky alter kaker revealed he has lost over $9 billion in the past six years on misguided bets on a wide-scale stock market collapse, and that IEP has lost money every year since 2014 as a result. While he’s not shy about telling other companies how to operate, he admitted that, “maybe I made the mistake of not adhering to my own advice in recent years.” 


Finally, death, taxes and 13-F filings. The most recent 13-Fs revealed Bill Ackman’s Pershing Square and Dan Loeb’s Third Point have major stakes in Alphabet. Barron’s Eric Savitz points to the company’s founders 51% voting control and notes, “this does not seem like a company under siege by activists. More likely it’s two smart investors that saw a clear buying opportunity and pounced.” The timing is noteworthy as Alphabet has been cutting costs in response to investor sentiment, something Loeb argued the company should be doing more of in his Q1 investor letter.   


Have a great weekend,  

GPP Team 


Reuters: Shake Shack Settles with Activist Investor, Adds Independent Director 

After news broke earlier in the week that activist investor Engaged Capital was planning a proxy contest at Shake Shack (with a side of fries), news broke on Tuesday that both sides agreed to settle. Read More

Bloomberg: Elliott’s Back for Blood, But This Time Is Harder 

Liam Denning breaks down the upcoming rematch between NRG Energy and Elliott Management and speculates that the activist’s demands, including potential spin-offs or management changes, are unlikely "to be quite as accommodating this time around". Read More

Financial Times: Carl Icahn Admits Mistake with Bearish Bet that Cost $9bn 

In his first media comments since Hindenburg Research called him out for running a "Ponzi-like" business, Carl Icahn revealed to Ortenca Aliaj and Antoine Gara that his bets that the stock market would crash have cost him over $9 billion in the past six years. Read More

Barron’s: Why Two Activist Hedge Funds Took a Stake in Google-Parent Alphabet  

Eric Savitz speculates that while both Bill Ackman's Pershing Square and Dan Loeb's Third Point have built up positions in Alphabet, neither activist is likely to put Google's parent company "under siege". Read More


Harvard Law School Forum on Corporate Governance: Nine Developments and Trends Shaping US Shareholder Activism in 2023 

Thomas Christopher, Maia Gez and Ty C. Akkoyun from White & Case LLP list major themes influencing shareholder activism activity including the rise of "SPACtivism", increased scrutiny toward ESG-campaigns and large-cap companies, shareholder empowerment, the advent of universal proxy and more. Read More

The Information: PayPal, Under Shareholder Pressure, Looks to Sell Xoom 

Maria Heeter and Cory Weinberg report that PayPal is considering offloading the money-transfer service Xoom for around $1 billion, a potential cue that Elliott Management's is impacting the company's strategic direction since it took a stake last year. Read More


Fortune’s CFO Daily: Mass Layoffs Are Terrible for Shareholders 

Sheryl Estrada breaks down findings by the research firm Gartner suggesting that while layoffs are normally justified as cost-saving tactics, job cuts negatively impact shareholder returns and that tactics such as four-day work weeks might be potential cost-saving alternatives. Read More

Wall Street Journal: CEO Pay Packages Fell Sharply in 2022, the First Decline in a Decade 

Inti Pacheco points out that pay packages declined for over two-thirds of CEOs at S&P 500 companies last year due to worse stock price performance, although over half also got a raise in median overall pay. Read More


McKinsey: Signs of Optimism in the M&A Market 

McKinsey's Jake Henry and Mieke Van Oostende report that data on M&A activity during the first quarter of 2023 offers "shoots of optimism" that dealmaking activity will continue to increase and potentially help boost economic recovery. Read More

Reuters: US Pipeline Operator ONEOK Moves into Oil, Products with $18.8 billion Magellan Deal 

In an $18.8 billion deal, the natural gas-focused ONEOK Inc. will buy Magellan Midstream Partners, a pipeline operator. As natural gas has been struggling this year, adding business in crude oil could give ONEOK more financial flexibility, Jyoti Narayan and David French write. Read More


The New York Times: EU Approves Microsoft’s $69 Billion Deal for Activision 

EU regulators announced they have approved Microsoft's proposed $69 billion acquisition of video game developer Activision Blizzard after Microsoft agreed to concessions around its cloud gaming offerings, writes Adam Satariano, but questions remain whether U.S. or UK regulators will also approve the deal. Read More

Financial Times: FTC Warns of ‘Rampant’ Pharma Consolidation as It Targets $28 Billion Amgen Deal 

Stefania Palma breaks down the FTC's decision to fight Amgen's planned $28.3 billion deal for Horizon Therapeutics in court, raising further doubts about other pharmaceutical deals including the potential Pfizer-Seagen deal. Read More


Fortune’s CEO Daily: The Political Pushback Against ESG Is Resonating with Fortune 500 CEOs 

Alan Murray and Nicholas Gordon suggest that political furor surrounding the "anti-ESG" movement is causing some doubts among CEOs about their commitment to sustainability and DE&I efforts. Read More

Wall Street Journal Opinion: The ESG Proxy Vote Ranking 

The Wall Street Journal's editorial board examines which large asset managers vote were most likely to vote along with pro-ESG proposal. Read More 


Peanuts, hot dogs and Mr. and Mrs. Met. On Thursday, GPP’s Steve Lipin made it CitiField to support fellow Mets fan David Faber as he threw out the ceremonial first pitch for the Mets vs. Tampa Bay Rays game. It was a beautiful day at Citi Field and a  win for the Mets, as the team from Queens took two out of three from baseball’s hottest team. Not a bad week for David following his headline grabbing interview with Elon Musk!

Tonight, we look forward to seeing friends and colleagues at the 80th Financial Follies hosted by the New York Financial Writers’ Association, a convening of hacks and flacks at the intersection of business and media. The night will feature video skits submitted by journalists and pr firms alike to help fund scholarships for the next generation of financial journalists, media awards and educational and networking events for active business journalists and public relations professionals. See here for Bill Smith’s guide for this year’s Follies!


  • Meredith Cole and Scott Winter were named co-chairs at Innisfree M&A Incorporated, with Chairman Arthur Crozier assuming the new role of Executive Chair. Read More

  • Linda Yaccarino has departed NBCUniversal to join Twitter as its new CEO. Read More

  •  Troy Broderick joined the boutique investment bank Perella Weinberg Partners, only two weeks after being promoted to M&A COO at Goldman Sachs. Read More

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