The Activists Are Back

Agitators such as Nelson Peltz and Elliott Management are going after noteworthy names now that stock prices are down

- Ed Hammond

At the start of January, Nelson Peltz returned from doing whatever billionaires do over the holidays and told Walt Disney Co. it stunk. That’s not verbatim. But when someone says you have “prominent cracks in the flywheel,” what else can it mean?

Activist hedge funds make their money by seeking out just such cracks. Their playbook, of which Peltz is a famed exponent, says that companies (read: share prices) can be improved (read: go higher).

The whole process—storied corporations being picked apart by belligerent, publicity-hungry rich guys—can be the stuffof high drama, yet for the past few years it hasn’t been. The stock market was rising so high that activists struggled to find juicy targets among the big names. Instead they went after smaller, weaker, more boring companies. Barely a month into 2023, things look quite different. Hours after Peltz threw shade at Disney, Bayer AG, the German conglomerate behind everything from aspirin to weedkiller, found itself under attack from JeffUbben, the activist-turned- constructivist-turned-occasional-dissident-shareholder.

A few days later, Elliott Management Corp. announced that it held a stake in tech giant Salesforce Inc. (Ubben showed up there, too.) By the end of that week a third investor, ValueAct Capital, had entered the fray. In addition to disclosing a stake, it achieved something the others had not: winning a seat on Salesforce’s board for Mason Morfit, its chief executive officer. Together, Disney, Bayer and Salesforce have market valuations totaling more than $400 billion, and broad brand recognition that’s guaranteed to grab headlines.