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The Shareholder Activism Iceberg

Shareholder activists have continued to see an influx of investment dollars seeking to ride the success of their investment strategies. It should come as no surprise then that shareholder activism has grown to encompass what now includes 265 institutional investors according to S&P Capital IQ. In this post, we’ll dig into the public ownership regulatory filings shareholder activists disclose to see what connections we can draw across this ever growing universe of investors. 

First up is Yahoo, which has a well-worn shareholder activist path to the executive office.   Embattled CEO Marissa Mayer has seen her fair share of engagement with the likes of prominent activists like Starboard Value.   But what may come as a surprise to many is that 53 of Yahoo’s current shareholders are identified as activists according to S&P Capital IQ.   In total, activists control 7.23% of Yahoo’s shares outstanding, worth a combined $2.25 billion.  The trend is accelerating, with activists collectively adding over 43 million additional Yahoo shares based on the most recent data available, a nearly 63% increase vs. their prior reported positions.  

The underperformance of Energy stocks has also attracted the attention of activists.  Liquefied natural gas operator Cheniere Energy has caught the eye of Carl Icahn, as has been widely publicized.   Icahn currently holds 32.7 million shares of Cheniere, a position he’s been building throughout 2015.But again, what is of greater interest is the numerous other activists that are also holding the stock.  In fact, 29 of Cheniere’s shareholders are activists according to S&P Capital IQ, holding a substantial 27% of shares outstanding. Bucking the selling trend in Energy stocks, these 29 activists in aggregate have added 12.5 million additional shares of Cheniere based on the most recent data available, a nearly 16% increase vs. their prior reported positions.  

So what’s the moral of the story? Simple: Under the surface of a stock may lurk not one activist, but dozens of them that can magnify the effects on a company’s stock price and strategy as they accumulate substantial share positions.

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