Does Icahn's Involvement Affect Share Price in the Long Run?

Here is an interesting look at the share performance of companies Activist Investor Carl Icahn has become involved with:

(Graphic courtesy of the WSJ.)

One has to wonder if Carl's involvement even matters that much and if companies' share performance is more a function of their overall prospects than his skill at agitating for positive change within the company. In general I've always felt that most activist investors are more interested in generating positive investor sentiment via pushing for a sale, a management shake-up, etc, than they were in actually pushing for positive change within the company.

Mind you I'm all for Activist Investors and if I had the money and clout I would probably be engaging in some "capitalist agitation" myself, I just question their motives sometimes.

Disclosure: At the time of publishing the author didn't own a position in any of the companies mentioned in this article.

Comments

[notsosmart:]

i have seen interviews with some of these activists.when asked why they do it since they have more money than they need they all say its the game to win.of course the byproduct of winning is more money to play more games. its all vegas,slower & nobody brings you a drink.

2008 Jul 26 03:13 PM

[catbird:]

The key to biotechs like Biogen is to develope and have a pipeline for new blockbuster drugs. When Biogen had to take Tysabri off the market after three deaths, management sensitively steered the right course and convinced regulators to let it be reintroduced with strict warnings and monitoring. With the support of users who had been benefiting from "T" and suffered because of its withdrawal, Biogen has regained most of the drop in stock price in recent days. Icahn has been a blessing in drawing attention to the stock, and a curse by interfering with mngmt by pushing them to put the company up for sale much as he unsuccessfully did with Yahoo. Biotech companies exist and thrive because of their trade secrets, patents, and research genius ideas.

The company obliged Icahn in inviting bids, but no pharmaceutical or biotech stepped up to pay the premium for a buyout.

Now the higher earnings and prospects just announced are rewarded by a nice bump up.

If Icahn's involved in BIIB had a big part in the stock move since he first announced, I'll say, "Thanks, Carl" even though I'm not on a first name basis with him.

2008 Jul 27 11:04 AM

[Arthur J:]

It was with great hope seeing the end of CEO "Zander the Commander" plus the addition of Carl Icahn to the board that the changes would add some life to the Big "M" stock price. So far it looks like the New CEO and Icahn are just a couple more gravy train passengers to be added to the cargo list.
It would be a revelation to see some one added to the company with a bit of genius equal to what the founder of the company once had.

2008 Jul 29 11:39 AM