BlackRock Inc. (“BlackRock”), one of the three largest asset management firms in the United States, announced in January that sustainability will be a significant consideration in future investment decisions. The firm’s announcement is a drastic change in its investment policy that has been met with mixed support from activist groups. While there is mixed sentiment about the sincerity of BlackRock’s announcement, the firm may be laying the foundation for other investment management groups to mimic as they implement strategies for minimizing the risks of climate change in their clients’ portfolios.

WeWork’s biggest investor, SoftBank Group Corp., took over 80 percent of WeWork in a $9.5 billion rescue package in October following the company’s botched initial public offering (“IPO”) attempt. Concerns about the company’s losses and corporate governance forced WeWork to shelve its plans for an IPO in late September leading to the need for an influx of capital to replace what was expected to be raised by WeWork in the IPO. (Eavis and de la Merced, The New York Times). WeWork, valued at $47 billion in January 2019, is valued at the start of 2020 at less than $8 billion. (Hsiao, Top1000funds.com). This $40 billion loss in less than a year is serving as a lesson for investors in high-profile startups with valuations upwards of $1 billion (“unicorns” or “unicorn companies”), and as a warning for growth-stock companies looking to make their public market debuts. (Alpeyev, Tan, Davis and Huet, Bloomberg). This post outlines WeWork’s turbulent 2019 and briefly explores what may become a “unicorn” startup burnout case study business students will study for years to come. 

California-based GoodRx Inc. (“GoodRx”), an online and mobile app marketplace for discounts on prescription drugs, has acquired San Francisco-based telemedicine startup HeyDoctor LLC (“HeyDoctor”), an online platform that provides treatment, prescriptions, and lab tests from doctors for routine medical care. (Brown, Bloomberg; LaRock Business Insider). The combined company enables GoodRx to position itself solidly in the virtual health care market by providing HeyDoctor’s telemedical services to its vast network of loyal consumers.

Five hundred eighty-one  companies worldwide faced activist proposals in the first two quarters of 2019 (“H1”), also known as the “proxy season,” in which 80 percent of all public company annual meetings occur. (Activist Insight, Activist Insight Monthly June 2019). While shareholder activism in 2019 decreased relative to 2018, in general shareholder activism has been on the rise over the last decade. As the three largest asset managers in the United States, BlackRock, State Street, and Vanguard (the “Big Three”), are not to blame  for this increase, this post explores who the most active shareholders are and the extent to which their goals were realized in the 2019 proxy season. 

Eighty percent of all public company annual meetings are held during the first half of the year, from January 1 through June 30 (“H1”). (ProxyPulse, Broadridge). These first two quarters of the year are often referred to as the “proxy season” or “campaign season.” During this “season,” the majority of activist shareholder resolutions are proposed to management and, if resilient enough, are brought to a shareholder vote. Activist shareholders are individuals and institutional investors who initiate public campaigns as attempts to influence the management of companies in which they invest, typically in the realm of corporate governance, environmental, and social issues. Part I of this post will briefly summarize the activity by these shareholders in the 2019 season in relation to the record-breaking shareholder activism observed in 2018 and comment on the influence of the three largest asset managers in the United States. Part II will compare who the most active shareholders are, and what trends can be observed in the 2019 proxy season. 

On March 12, 2019, executives of T-Mobile US Inc. (“T-Mobile”) and Sprint Corporation (“Sprint”) testified in the third round of Congressional Hearings concerning the merger of the two companies. T-Mobile’s purchase of Sprint for $26 billion was announced almost a year ago on April 29, 2018 and continues to endure questioning from regulators. (Victoria Graham, Bloomberg). The Federal Communications Commission (“FCC”) and the Democratic-controlled House Subcommittee on Antitrust are reviewing the merger under the Communications Act of 1934 to ensure it promotes “the public interest, convenience, and necessity.” (47 U.S.C. §310(d); Chairman Frank Pallone, Jr., Committee on Energy and Commerce). While the U.S. Department of Justice’s (“DOJ”) antitrust division does not consider U.S. industrial policy in merger reviews like the House Subcommittee, it is looking at whether the deal harms competition. (Todd Shields et al., Bloomberg). 

BlackRock Inc. (“BlackRock”), one of the three largest asset management firms in the United States, announced in January that sustainability will be a significant consideration in future investment decisions. The firm’s announcement is a drastic change in its investment policy that has been met with mixed support from activist groups. While there is mixed sentiment about the sincerity of BlackRock’s announcement, the firm may be laying the foundation for other investment management groups to mimic as they implement strategies for minimizing the risks of climate change in their clients’ portfolios.

WeWork’s biggest investor, SoftBank Group Corp., took over 80 percent of WeWork in a $9.5 billion rescue package in October following the company’s botched initial public offering (“IPO”) attempt. Concerns about the company’s losses and corporate governance forced WeWork to shelve its plans for an IPO in late September leading to the need for an influx of capital to replace what was expected to be raised by WeWork in the IPO. (Eavis and de la Merced, The New York Times). WeWork, valued at $47 billion in January 2019, is valued at the start of 2020 at less than $8 billion. (Hsiao, Top1000funds.com). This $40 billion loss in less than a year is serving as a lesson for investors in high-profile startups with valuations upwards of $1 billion (“unicorns” or “unicorn companies”), and as a warning for growth-stock companies looking to make their public market debuts. (Alpeyev, Tan, Davis and Huet, Bloomberg). This post outlines WeWork’s turbulent 2019 and briefly explores what may become a “unicorn” startup burnout case study business students will study for years to come. 

California-based GoodRx Inc. (“GoodRx”), an online and mobile app marketplace for discounts on prescription drugs, has acquired San Francisco-based telemedicine startup HeyDoctor LLC (“HeyDoctor”), an online platform that provides treatment, prescriptions, and lab tests from doctors for routine medical care. (Brown, Bloomberg; LaRock Business Insider). The combined company enables GoodRx to position itself solidly in the virtual health care market by providing HeyDoctor’s telemedical services to its vast network of loyal consumers.

Five hundred eighty-one  companies worldwide faced activist proposals in the first two quarters of 2019 (“H1”), also known as the “proxy season,” in which 80 percent of all public company annual meetings occur. (Activist Insight, Activist Insight Monthly June 2019). While shareholder activism in 2019 decreased relative to 2018, in general shareholder activism has been on the rise over the last decade. As the three largest asset managers in the United States, BlackRock, State Street, and Vanguard (the “Big Three”), are not to blame  for this increase, this post explores who the most active shareholders are and the extent to which their goals were realized in the 2019 proxy season. 

Eighty percent of all public company annual meetings are held during the first half of the year, from January 1 through June 30 (“H1”). (ProxyPulse, Broadridge). These first two quarters of the year are often referred to as the “proxy season” or “campaign season.” During this “season,” the majority of activist shareholder resolutions are proposed to management and, if resilient enough, are brought to a shareholder vote. Activist shareholders are individuals and institutional investors who initiate public campaigns as attempts to influence the management of companies in which they invest, typically in the realm of corporate governance, environmental, and social issues. Part I of this post will briefly summarize the activity by these shareholders in the 2019 season in relation to the record-breaking shareholder activism observed in 2018 and comment on the influence of the three largest asset managers in the United States. Part II will compare who the most active shareholders are, and what trends can be observed in the 2019 proxy season. 

On March 12, 2019, executives of T-Mobile US Inc. (“T-Mobile”) and Sprint Corporation (“Sprint”) testified in the third round of Congressional Hearings concerning the merger of the two companies. T-Mobile’s purchase of Sprint for $26 billion was announced almost a year ago on April 29, 2018 and continues to endure questioning from regulators. (Victoria Graham, Bloomberg). The Federal Communications Commission (“FCC”) and the Democratic-controlled House Subcommittee on Antitrust are reviewing the merger under the Communications Act of 1934 to ensure it promotes “the public interest, convenience, and necessity.” (47 U.S.C. §310(d); Chairman Frank Pallone, Jr., Committee on Energy and Commerce). While the U.S. Department of Justice’s (“DOJ”) antitrust division does not consider U.S. industrial policy in merger reviews like the House Subcommittee, it is looking at whether the deal harms competition. (Todd Shields et al., Bloomberg).