4 ms·
I'm not sure I buy this argument. Short-term shareholders and long-term shareholders both benefit from enhancing the long-term "permanent" value of a company,
by YokoZar 13y ago
I'm not sure I buy this argument. Short-term shareholders and long-term shareholders both benefit from enhancing the long-term "permanent" value of a company, as you can always just sell some of the stock to realize those gains in a shorter time.
Similarly, if you have drastically less risk tolerance than other shareholders, you are already throwing money away by being overinvested in a single stock. Shareholders who don't want Icahn to take risks with eBay stock shouldn't respond by demanding eBay be run conservatively, they should respond by diversifying their portfolio.
- yesiamyourdad 13y agoYou're arguing two different things. First: if changes to a company enhance its long term value, it may benefit short term shareholders, but logically, long-term holders will benefit more. In fact, if short term holders were to benefit more then it makes no sense to be a long term holder, and if long term holders stand to benefit more, then why would you be selling all, or practically all, of your position? If someone buys a company's stock, insists on major structural changes, and then sells the stock, how can you argue that this investor is acting in the long term investor's interest without either being a financial incompetent or altruistic to the point of sainthood? For the risk tolerance point, you're assuming that everyone who opposes Icahn is overinvested in eBay, which doesn't follow at all. It may be that you would rather see eBay invest in itself or return excess cash in the form of a steady dividend. Or you may flat out disagree with the notion of spinning off Paypal. Making a stupid decision isn't "risk tolerance", it's "hey man, hold my beer and watch this".