David Einhorn

The barbarians are still at the gate

September 23, 2013: 5:00 AM ET

Activist investors are getting more powerful and more determined than ever to take on the managements of public companies. The surprise is just how giant that prey has become.

By Geoff Colvin, senior editor-at-large


FORTUNE -- Talk candidly with corporate directors and they'll tell you their No. 1 worry is no longer the economy or the chance of an accounting scandal -- it's activist investors. That's because activists have taken on a new role this year, proving they can influence the world's largest, most famous corporations by buying tiny stakes and then telling the board exactly what they think it's doing wrong.

The change in activists' tactics and influence has been dramatic (see chart below). Just three years ago, the activists' biggest targets were mostly smaller companies in which the activists took significant stakes in order to get the boards' attention. Now no company is too big -- Apple (AAPL), a target of Carl Icahn and David Einhorn's Greenlight Capital, is the world's most valuable company -- and stakes smaller than 1% are often enough to get a hearing with the directors or top executives.

The main reason for activists' new swagger is that they're deploying far more capital than ever (see chart above). Look for the growth to continue so long as activist investing keeps working: Activist funds overall are beating the market, and major pension funds have grown more willing to hand over a chunk of their trillions.



This story is from the October 07, 2013 issue of Fortune

  • David Einhorn's best week ever

    The hedge fund manager has a string of hits in 2012.

    FORTUNE -- The year didn't start off great for David Einhorn. But things seem to be turning around for the hedge fund manager.

    First of all, Einhorn's deal to buy a portion of the Mets fell apart in late 2011. Then in late January, the hedge fund manager, who is famous for predicting Lehman Brothers' demise, and his firm Greenlight Capital MORE

    - May 4, 2012 6:00 AM ET
  • Einhorn will not be Mr. Met

    Hedge fund manager's baseball deal has died.

    It looks like the closest David Einhorn is going to get to being a NY Met was on Halloween in 1975.

    Back in May, the hedge fund manager said that he had agreed to purchase a minority stake in the team for around $200 million. He wouldn't comment on deal specifics, but many speculated that there was some sort of pathway to majority ownership.

    Now the MORE

    - Sep 1, 2011 11:48 AM ET
  • Einhorn and the underdogs

    First Microsoft, now the Mets. The Greenlight Capital founder is supporting the teams that no one loves. 

    FORTUNE -- This year, David Einhorn is throwing his money behind the underdog.

    By the end of next month, the founder of hedge fund Greenlight Capital will trade $200 million for a minority stake in the New York Mets, the Major League Baseball team that lives in the shadow of the Yankees and that has missed MORE

    - May 26, 2011 12:21 PM ET
  • Meet the Met: Live-blogging David Einhorn

    Hedge fund manager David Einhorn today announced that he has agreed to acquire a minority stake in the woeful New York Mets for $200 million. He's holding a press call at 11:30 to discuss the deal -- can you short a baseball team, outside of Vegas? -- and I'll be live-blogging below (just keep hitting refresh):

    * We've just got music so far...

    * Ok, here we go. Einhorn will begin with MORE

    - May 26, 2011 11:31 AM ET
  • Berkowitz throws the gauntlet in the battle over St. Joe

    Bruce Berkowitz is proposing to become chairman of the Florida developer. That could spell trouble for short seller David Einhorn.

    Last week, the investor Bruce Berkowitz of Fairholme Capital was onstage at Columbia University's annual Investment Management Conference in New York when he got a question about St. Joe Company (JOE), one of the most debated stocks among certain moneyed circles. Ever since noted short seller David Einhorn publicly bashed the MORE

    - Feb 7, 2011 12:38 PM ET
  • The big hubbub over St. Joe Company

    Bruce Berkowitz, the mutual fund star and St. Joe's largest shareholder, is now on its board. But don't bet on a Berkowitz buyout.

    St. Joe Company is grabbing a lot of headlines for an obscure residential real estate developer in Florida's Panhandle. If you haven't followed, here's a quick recap: noted short seller David Einhorn gave his idea of what the company is worth during a hedge fund conference back in MORE

    - Dec 17, 2010 12:10 PM ET
  • Why David Einhorn is short St. Joe

    The Greenlight Capital manager made his name by publicly shorting Lehman Brothers. Now he expects shares of the Florida real estate firm to fall.

    By Scott Cendrowski, reporter

    David Einhorn is double-dipping his short ideas.

    At the 6th annual Value Investing Congress on Wednesday, the noted short-seller presented his 139-slide bearish case against The St. Joe Company (JOE), a Florida real estate firm that made a strong push into residential developments. Einhorn was MORE

    Oct 13, 2010 1:43 PM ET
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