Rob Bates On Activist Investors: Sounds Great- In Theory

Opinion piece
21/01/2016 21:43

In his latest opinion piece, award winning JCK News Director Rob Bates expresses his concern over the latest example of so-called "activist investors" nudging their way into companies. In the past weeks, Toronto-based hedge fund K2 & Associates Investment Management led a revolt targeting Dominion Diamonds, demanding a meeting with management to discuss a strategic review. A few days later, Reuters reported anonymous shareholders believed the company should use some of its nearly $300 million in net cash for a stock buyback. In the latest episode, Dominion Diamonds announced a considerable Board of Directors reshuffle last week, with frontman Gannicott stepping down and K2 portfolio manager Josef Vejvoda joining the Board. In his article Bates argues that while the idea of activist investors having a stronger voice in a company sounds like a refreshing strategy in theory, the reality of past examples paints a very different picture. His conclusion: "Let’s hope K2 will leave the miner alone to do its business. These days, that is hard enough."