Or, perhaps more accurately, provides a data point in support thereof. In any case, I am increasingly convinced that the argument I advanced in my essay, Preserving Director Primacy by Managing Shareholder Interventions, is correct. In that essay, I argue that hedge fund activism directed at operational aspects of a target's business will often be unavailing because hedge fund managers make lousy operations gurus. Case in point from today's WSJ:
Hedge-fund manager Bill Ackman moved to dump his entire stake in J.C. Penney Co., ending a failed bet on the retailer that cost his fund more than $600 million, resulted in the loss of thousands of jobs and left the 1,100-store chain still struggling to right itself.
I can't find it in myself to feel sorry for Ackman, but I do feel sorry for all those employees who lost their jobs as a result of his overweening hubris, just as I did those who lost their jobs at TWA because hedge fund manager Carl Icahn thought he could manage TWA.
