ShmoopTube

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Finance allah shmoop what is activist investing Welshman gigi foot

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massagers has been around forever great grandpappy elmo spanish for

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the mo sold them to the u s army after

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long marches through the r den in the first world

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war Teo you know end all wars The soldiers then

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bought them when they got home and consumers followed suit

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with company was so successful that it didn't need to

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be all that efficiently run It went public in nineteen

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sixty five and was a good stock for a while

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Then in the early nineteen nineties the company didn't adapt

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to the new world of internet distribution and robot manufacturer

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so the stock languished It remained the same price in

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nineteen ninety five that it was some two plus decades

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later Well during that same period the overall stock market

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went up almost five hundred percent and shmoop gigi's primary

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competitors P eta terrible went up eight hundred percent stealing

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loads of market share from schmidt ge whose product was

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now ah define a ble inferior Well since this company

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was public and largely now owned by the public the

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public had the right to have a say in how

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the company was managed Endless angry letters were sent to

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the ceo elmo the fourth jr a direct descendant of

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happy elmo the founder Those letters were ignored more letters

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followed to the board and they were ignored as well

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Then finally a set of activist investors decided it was

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time to step in Ironically on comfortably massage feet courtesy

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of shmoop gigi well the activist investors simply coalesced all

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of the common stock shares they could find you know

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identifying who owned him and said hey can you vote

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with us And when the next board election came where

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three of the eleven director seats were to be voted

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on while the activist investors elected their own slate or

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group of directors who would begin to force the company

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to behave more like a shareholder friendly profit seeking company

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instead of ah make work project for the progeny of

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pappy elmo to simply take a salary and make tens

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of thousands of sore feet relatively happy In fact the

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activism here was pretty common in situations like this fat

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companies who didn't streamline and adapt but who still had

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pretty good brand names were out there And while there's

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a whole qadri of lawyers who do little other than

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chase companies earning twenty cents a share when they should

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be earning a dollar a share for share holders like

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that's who they work for shareholders Activist investing has become

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so common that it is almost an industry or investment

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category or strategy unto itself now and that's A good

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thing because some of those fat cos well you know 00:02:51.66 --> [endTime] they could stand to lose a pound or two

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