The Joys Of Activist Investing

Ah, to be an activist investor. Push around executives, demand ‘shareholder friendly’ measures and all this while maintaining the flexibility of trading in and out of shares. After pushing hard for a breakup, Carl Icahn quickly rang the register on a chunk of his Motorola Mobility (MMI) stake shortly after its takeout announcement. Too much work? John Paulson just had to jump onto a conference call in order to send HIG‘s share price soaring [he has done some more work since though and I hope to write more about this one soon].

Another activist benefactor is Jana Partners, who recently sold 3.9 million shares of the Marathon Petroleum Corporation (MPC) right after the stock jumped 10% on the announcement that it plans to pursue a spinoff of its pipeline operations. An idea pushed hard by Jana. The WSJ estimates the firm booked ~$44mm in gains. The fund still maintains a 4.5% stake in the company though and “intends to retain a significant interest” in Marathon. While some of these moves are likely just portfolio rebalancing, it must be nice to have that kind of power and flexibility.

Disclosure: Author holds no position in any stock mentioned.