Corporate News: Hedge Fund Invests in Microsoft

Activists are able to change how corporations operate if they have enough shares of a specific company. Hedge-fund executives often claim that they have enough shares to take on a board position at specific companies. Jeffrey W. Ubben is the founder of ValueAct Capital Management LP, which is a hedge-fund that invests in a small number of companies. He was able to take a board seat at Acxiom Corp with its shares of the company because he disagreed with the decisions made by the director. ValueAct was also able to push Gardner Denver Inc to sell itself to KKR & Co., which is a private equity firm. Such activists also influence the stock’s market trend. At Ubben’s investor conference, he discussed the profitability of Microsoft and how investors seem to undervalue its true worth. This conversation sparked Microsoft’s shares to increase 3.6%. Unfortunately, it is unlikely that Ubben would be able to buy enough shares to change Microsoft’s operations and Board directors.

This trend exists among other investors and hedge-fund executives because they disagree with policies that various public companies adopt. The opportunity for shareholders to influence a company gives the public hope that a company does not have total authority over its company or even the market in general.

 

Written By: Melody Mark

Source:

Glazer, Emily, and Shira Ovide. “Corporate News: Hedge Fund Invests in Microsoft.” The Wall Street Journal. Dow Jones & Company, 23 Apr. 2013. Web. 23 Apr. 2013.

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