E I Du Pont De Nemours And Co (NYSE:DD) might have taken the day on fending off pressure from activist investor, Nelson Peltz of Trian Partners, but to shareholders something is not right. Peltz has always reiterated that DuPont is a sleeping giant that is not generating the amount of value it ought to, thanks to its bloated corporate structure. Fox Business correspondent, Charles Gasparino, believes things could have been better had the company come to a compromise with the activist investor instead of locking him out completely.
Peltz already knew what was coming his way having affirmed it was highly unlikely he was going to change the outcome of a vote controlled by big mutual funds, hedge funds, and pension funds. The vote that denied Peltz his way into E I Du Pont De Nemours And Co (NYSE:DD) clearly highlights how some investors are becoming concerned with the growing influence of activist’s investors in stocks.
However, Gasparino affirms sometimes it is necessary for some stocks to receive a boost from activist investors if shareholder value is to be realized in the long term.
“Most of the activists that I know Nelson Peltz even Carl Icahn he is in these stocks for a while he is advocating for changes. They are advocating for changes in a way that I believe is long term oriented; Nelson Peltz wants to work with management,” said Mr. Gasparino.
Big investors in companies have always shot down opportunities for activist investors to get involved in their stocks on the assumption that most of them are usually in it, for the short term. However Gasparino believes Peltz was not in for the short term, but essentially wanted to awaken a sleeping giant that he believes needs a lot of unlocking. Apple Inc. (NASDAQ:AAPL) is one of the success story that has risen above activist investor pressure, to become a value generating stock thanks to pressure from Billionaire investor Icahn.
“Look at what Carl did with eBay Inc (NASDAQ:EBAY) and PayPal. Again it was logic to break it up, and he got his wish and it has been good for shareholders,” said Mr. Gasparino. E I Du Pont De Nemours And Co (NYSE:DD) was closing on the red after hours of trading, which Gasparino believes has to do with some investors affirming there is a need for change.
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