Falcone, a hedge fund king humbled (TheSundayTimes)
PHILIP FALCONE peered through the tiny round frames of his glasses and craned his neck toward the microphone. “I was the youngest of nine kids who grew up in a threebedroom home in a working-class neighbourhood,” he began. “My father was a utilities superintendent who never made more than $15,000 a year, while my mother worked in the local shirt factory.
Does Hedge Fund Activism Actually Help Companies? (WallStCheatSheet)
From Apple Inc. (NASDAQ:AAPL) to J.C. Penney Company, Inc. (NYSE:JCP), activist hedge funds have been in the news recently. Activists purchase minority blocks in target companies and are able to intervene in various firm policies. Critics say that intervention hurts companies in the long run and that activist hedge funds are only out for short-term profits. A recent paper from Duke University’s Fuqua School of Business’s Alon Brav, Harvard Law School’s Lucian Bebchuk, and Columbia Business School’s Wei Jiang proves the critics wrong. The study, “The Long-Term Effects of Hedge Fund Activism“, shows companies’ performance improves, on average, subsequent to activists’ involvement.
Ballmer Exit Another Sign Of Growing Influence Of Activist Investors (Forbes)
It increasingly looks like Steve Ballmer’s decision to quit as Microsoft’s chief executive by announcing he would retire within the next year represents another big scalp for activist investors who have taken the financial markets by storm. Reporting about what happened in Redmond, Wash., last week suggests that Jeffrey Ubben and his ValueAct hedge fund played a fundamental role in the events that have led to a management change at the top of Microsoft Corporation (NASDAQ:MSFT). The Seattle Times reported that ValueAct pressure may have played role in Ballmer leaving, citing Nomura Securities analyst Rick Sherlund, who said that the board of directors was threatened by a potential proxy fight from ValueAct that would have put a spotlight on a decade of problems at the software giant.
How Bad Hiring Decisions Can Mess Up a Good Business Strategy (Linkedin)
This is not a story about Steve Ballmer, Steve Jobs, Tim Cook or Carl Icahn, although they all help to make the point that business strategy is often overlooked when making critical hiring decisions. Hiring people who aren’t naturally driven by the same business needs, no matter how brilliant or capable, can often take a company off-course. So can activist investors. …In an earlier post I suggested that there were only four jobs in the world and four types of people. Putting a good person in the wrong job is a recipe for under-performance and dissatisfaction. Here’s the quick summary of the four work types: Thinkers: these are the people who come up with new ideas, new products and new ways of thinking about processes, people, and tasks.
Rupee not undervalued, government ‘brain-damaged’: Marc Faber (NDTV)
On a day when the rupee continued its downward spiral, falling more than one per cent, Swiss investor and editor of the ‘Gloom, Boom & Doom’ report Marc Faber countered Finance Minister P Chidmabaram’s statement from last week that the rupee is undervalued. “If someone says that rupee is undervalued we have to put in the proper perspective, maybe in some sectors of the economy the rupee is undervalued but I don’t think the rupee is undervalued if you look at the prices of high-end luxury Mumbai properties,” Mr Faber said. Mumbai property prices are amongst the highest in world, he added. The rupee last week fell to an all-time low of 65.56, and has lost nearly 15 per cent in the last three months.
Italy ‘faces financial storm’ over Berlusconi (Google)
Instability in Italy over Silvio Berlusconi’s future could trigger early elections next year and punish the country on the financial markets starting this week, a top US economist warned on Monday. Nouriel Roubini, who teaches at New York University, said in an interview with La Repubblica daily that Italy, the eurozone’s third-biggest economy, was currently in a period of “controlled volatility”. He said that “if the situation worsens, which now seems hardly impossible, the consequences could be very damaging for Italy,” and warned that investors could start reacting negatively from this week.