Catching up with the Activist Investors at Dow and Dupont

It's been quite a while since I wrote about the activist investors at Dow and Dupont, Daniel Loeb and Nelson Peltz, respectively. I figured the merger of the two companies would be the end of it, particularly since the merger would be immediately followed by splitting the company into three parts in order to satisfy regulatory bodies. And that splitting was what both activists desired when they initially took up their positions (that plus a seat on the company's respective boards). But as the merger has dragged on (it was first proposed in December of 2015(!) and still isn't done), it's time to update what Loeb and Peltz are up to.

Peltz first. His position is easy to describe. He's sold off most of it so that he can be now bug Proctor & Gamble, GE, Sysco and Mondelez. That's truly shocking. As one writer stated,

"[c]orporate executives might want to think twice before relying on hedge fund matchmakers. It appears they are not even patient enough to stick around for the wedding."

Loeb on the other hand, seems to be getting rather impatient and the longer he waits, the bigger of a slice of wedding cake he expects. He is asking why cut the cake into 3 slices when you can cut it into 6 slices, and we all know 6 is bigger than 3, right? (Just like an amp that goes to 11 is better than one that goes to just 10.) And in making the additional slices, everyone gets an extra $20 billion dollars.

If that math doesn't make sense to you, well, I've noted in the past that Loeb has the math skills of a high school student (1 and 2), and a lousy student at that. Having lots of money and wealthy friends doesn't make you intelligent, but it will get you access to a microphone, strangely. If Loeb really believes that the combined value of the new company cut 3 ways is worth an extra $20 billion, then the market will quickly realize its mistake and value the companies appropriately with a larger stock price. And if that still isn't fast enough, then I suggest that Loeb get some of his rich friends together to buy the undervalued companies and split them yourselves. It's an old idea, but I believe it's called "putting your money where your mouth is".