In recent weeks, we’ve seen what Goldman’s global head of activism and defense Avinash Mehrotra described as a “swarm” of activists at large cap companies, which made up 18% of activist targets in 2022, according to a piece from Axios’ Michael Flaherty. In an interview this week with Bloomberg News, he pointed out that “wolfpacks” act together while swarms well, attack in an uncoordinated way at the likes of Salesforce. 

And it’s not just here at home. Activism is heating up around the world. Lots of activism activity in Europe has resulted in CEO exits, recently seen at Bayer in Germany and Vodaphone in the UK. In Canada, where activism is also ticking up, companies are staring down the first proxy season with new governance rules that could make it easier for activists to get elected to boards. And over in Asia, companies are bulking up on advisers as concerns around activists grow in Tokyo.

Digging deeper into the spike in activist action, ValueAct and its spun-off “ESG-ish” fund Inclusive Capital have had busy winters. ValueAct CEO Mason Morfit joined the board of Salesforce as a presumably preemptive maneuver by CEO Mark Benioff. Now, ValueAct has set its sights on Spotify, disclosing a stake as it calls for cost reductions and more efficient cost management at the media giant. Jeff Ubben, ValueAct’s founder who now runs Inclusive Capital Partners, didn’t want to be excluded and joined his former colleagues in building a stake in Salesforce, while calling for the replacement of the CEO of Bayer. 

Among the 13F filings this week, the big news was the diminishing confidence inMicrosoft’s Activision deal when 13Fs revealed that Warren Buffet’s Berkshire Hathaway cut 12% of its position in the video game company. Other notable moves included Third Point entering Microsoft, JetBlue, and International Flavors & Fragrances, while Trian exited P&G and Berkshire sold nearly its entire stake in Taiwanese chip producer TSMC.

Have a great weekend, 

GPP Team 

Bloomberg: Goldman Activism Head Says Companies Face “Swarm” of Agitators

Xinyi Luo and Ed Hammond report on the recent influx of activist “swarms,” as dubbed by Avinash Mehrotra of Goldman Sachs, describing investors who have simultaneously taken stakes in the same companies, oftentimes vying for different outcomes. Read More

Financial Times: Activist Investor ValueAct Takes Stake in Spotify

Eric Platt and Ortenca Aliaj report that ValueAct has built a stake in Spotify and is criticizing the music streamer's rising expenses associated with its podcast operations. Read More

Bloomberg: Activists Make European CEO Heads Roll on $225 Billion Warpath

Swetha Gopinath and Dinesh Nair break down shareholder activism in European markets and how activism firms have succeeded at replacing CEOs from the companies they target, but have faced subsequent difficulties enacting more foundational corporate governance changes. Read More 

Financial Times: Berkshire Hathaway Cuts Activision Stake as Microsoft Deal Flounders

Will the Activision Blizzard-Microsoft deal be approved? Some investors, including Warren Buffett, seem concerned about the deal’s chances. As Eric Platt and Jaren Kerr report, Berkshire Hathaway has reduced its stake in the gaming company following increased regulatory scrutiny around the deal. Read More 

Axios: Blue-Chip Companies Brace for New Assaults by Activist Investors

Michael Flaherty explains the factors driving the red-hot activism landscape, citing components such as the persistently stagnant M&A market, market conditions favoring dissident shareholders, and the growing trend of activist funds demanding divestitures, spinoffs, or restructuring initiatives. Read More

Bloomberg: Activist Investor Engine Capital Calls on Brenntag to Split

Eyk Henning writes that Engine Capital is targeting a strategic breakup of the German chemicals conglomerate Brenntag. Read More

Harvard Law School Forum on Corporate Governance: (Much Too Early) Observations on the Universal Proxy Card

Eleazer Klein and Sean Brownridge (Schulte Roth & Zabel LLP) analyze the first contests during the “universal proxy era” and suggest that while the rule changes have not yet prompted a surge in activism, it will take another three years to properly assess the impact of universal proxy. Read More

New York Times: Happiness or Success? Salesforce’s Marc Benioff Seeks Both 

With five activist funds now bearing down on the tech giant, Salesforce CEO Marc Benioff’s “Ohana” leadership philosophy is coming under scrutiny, writes David Streitfeld. Read More

Wilson Sonsini: 2022 Silicon Valley 150 Corporate Governance Report

In a recent memo, the law firm analyzes the most important considerations and aspects of corporate governance for the 150 largest and most influential firms in Silicon Valley. Read More

Financial Times: Shareholder Revolution

Gillian Tett, Kenza Bryan and Patrick Temple-West discuss how Tulipshare, a UK-based activism platform that allows retail investors to buy company shares and vote on ESG proposals through a mobile app, is following BlackRock's footsteps in trying to give individual investors more voting power and agency to advocate for corporate change. Read More

PRWeek: How CEO Comms Is Shaping Capitalism 2.0

Steve Barrett argues that good strategic communications and messaging is essential for executives to convince key stakeholders that their companies are committed to solving ESG issues. Read More

Fortune CEO Daily: CEOs Aren’t Abandoning Their ESG plans—but They Are Changing the Language They Use to Defend Them 

Alan Murray and David Miller discuss how CEOs are managing the recent onslaught of anti-ESG sentiment and initiatives. Mainly, leaders are hoping to clearly delineate the issues important to their companies and clearly communicate that to external parties. Read More

CAPITAL MARKETS

The Wall Street Journal: Mattress Maker Purple Innovation Hits Back at Investor Seeking Board Control

Purple Innovation issued a new chunk of cumulative voting preferred stock, giving its shareholders voting power proportional to the number of shares they own, writes Lauren Thomas – an interesting case study of agile and live-form corporate governance. Read More

The Information: Reddit Aims for IPO in Second Half as Market's Gears Quietly Turn

Corey Weinberg reports that Reddit is considering a potential IPO later this year, a potential indication that the IPO market is beginning to heat up. Questions remain whether other potential tech IPO candidates like Instacart, ServiceTitan and StockX will follow suit. Read More

FROM OUR DESK TO YOURS

Gladstone Place Partners joins the New York financial comms community in mourning the passing of industry veteran and talented communications practitioner, David Wells, whom we know as both a financial journalist and comms professional. 

PEOPLE MOVES

• Yahoo! Finance anchor Brian Sozzi has been selected to become the outlet’s Executive Editor. Read More

• Susan Wojcicki, the CEO of YouTube, will be resigning from the role and will be replaced by Neal Mohan, the company’s chief product officer. Read More

• Lael Brainard, the current vice-chair of the Federal Reserve, will become the next director of the National Economic Council. Read More 

• Gillian Tett has been appointed the next Provost of King’s College in Cambridge beginning October 2023. She will continue to be involved in the Financial Times through Moral Money. Read More 

• Christine Wilson, the FTC Commissioner, is resigning and explained her rationale in a Journal op-ed. Read More

• March 6, 2023: Council of Institutional Investors 2023 Spring Conference | Governance as the Linchpin: The "G" is Key – Washington, DC

• March 7, 2023: The Deal’s ESG & Sustainability Forum – New York, NY 

• March 16, 2023 – Barron’s: ESG Investing at a Crossroads – Virtual

• March 22-24, 2023: Tulane Law School Corporate Law Institute – New Orleans