Cunningham writes that:
Shareholder activists are pursuing large corporations, questioning those with multiple revenue streams and pejoratively labeling anything resembling a conglomerate a historical anachronism. In the world the activists envision, Jay and Robert Pritzker would not have been allowed to build the Marmon Group nor could Warren Buffettand Charlie Munger have created Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) Inc. (NYSE:BRK.A) (NYSE:BRK.B). That would be a huge loss for corporate America.
Activists such as Carl Icahn oppose corporate diversity because they say it is too hard for them to understand a complex business. Nelson Peltz is hectoring E I Du Pont De Nemours And Co (NYSE:DD)’s managers to split the chemical maker up because he says it is easier to grow a small company than a large one. Both urge handing cash over to stockholders in the process, rather than reinvest it in the business.
True, for some organizations size can be a drag. Bloat can prevent acting quickly and it is harder to move the needle at a massive company. But the splitters overlook how tremendous long-term value resides in corporate cultures that are built through steady, gradual, growth over long periods of time.
It's a valuable and effective counter to the pro-plotter arguments one usually gets from corporate law academics (at least those in Cambridge). Kindly go read the whole thing.
