Wednesday, January 3, 2018

Short term investors vs Long term investors

"The problem with our business is we’re making long-term investments, but we’re always going to be judged on a marked-to-market basis every day.
If the stock goes up very quickly, everyone’s going to say great, these guys are geniuses. If the stock goes down in the first year . . . they are going to say we screwed up."

Wednesday, December 27, 2017

We are long term investors in Chipotle

 “The problem with the judgment on Chipotle — it’s just too early. It’s 12 months after we joined the board of directors. We’re long-term investors. Chipotle is in the middle of a turnaround, and the stock is down from where we bought it. It doesn’t bother me at all, though it’s poor timing to have that happen to us now."

Monday, August 14, 2017

Leon Cooperman slams Bill Ackman on ADP

Omega Advisors founder Leon Cooperman, said Bill Ackman’s campaign on ADP was “foolish” and “not merited by the facts.” “This is something I happen to know quite a bit about and he’s dead wrong,” Cooperman, a former ADP board member. He said the company has been tremendously successful and praised its chief executive officer, Carlos Rodriguez.

Tuesday, August 8, 2017

Bill Ackman buys stake in ADP

Bill Ackman just took the next step in his campaign to shake up Automatic Data Processing Inc. by nominating three directors to the company’s board -- Veronica Hagen, Paul Unruh and Ackman himself.

Ackman’s Pershing Square Capital Management, which said last week that it owned 8.3 percent of ADP or about $4 Billion worth at current prices.

Ackman maintains there’s still significant room for improvement. He contends his board slate will help accelerate growth, improve margins and cut costs, making the company more competitive.

“We are pleased to nominate such superb independent directors to the board of ADP who will bring relevant skills, expertise and judgment to assist the board in achieving ADP’s maximum potential,” Ackman said in the statement.

ADP, which handles the paychecks of about 26 million Americans, has so far resisted Pershing Square’s demands since meeting with Ackman last week. The company said Ackman originally wanted five seats on the company’s 10-member board and had sought an extension of the Aug. 10 nomination deadline. Ackman also talked about potentially replacing Rodriguez with an outside candidate, ADP said.

New York-based Pershing Square said last week it was willing to work with existing management or an external CEO candidate to push for changes.

Pershing Square typically buys large stakes in a handful of big companies and agitates for executives and directors to make changes to boost shareholder returns.

Tuesday, July 11, 2017

Irene Rosenfeld summarizes the Pros and Cons of dealing with activist investors

Mondelez International CEO Irene Rosenfeld knows what its like dealing with activist investors. 

She has a history with activist investors like Bill Ackman. In an interview with Business Insider, she said she has learned a lot by engaging with activists and actually listening to what they have to say.

"These guys are smart, they have interesting ideas and I think it’s really productive to engage with them," she said. 

That isn't to say they're always right, however. Some of their demands are focused on the short-term, she said, and as a company CEO she has to find a balance between running the company for the here and now and the future. Activist investors also sometimes forget the human element, she said. 

"I think the single biggest disconnect that I found is that many activists simply sit in conference rooms and do calculations and analysis, independent of the reality of the fact that we are dealing with human beings and people’s lives," she said. "Some of the actions that one might want to take in overhead reduction, for example, can’t be executed at the drop of a hat."