{"id":7576,"date":"2023-05-11T23:41:32","date_gmt":"2023-05-12T03:41:32","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/activist-investor-elliott-pushes-for-changes-at-goodyear-shares-jump\/"},"modified":"2023-05-11T23:41:32","modified_gmt":"2023-05-12T03:41:32","slug":"activist-investor-elliott-pushes-for-changes-at-goodyear-shares-jump","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=7576","title":{"rendered":"Activist investor Elliott pushes for changes at Goodyear, shares jump"},"content":{"rendered":"
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\u00a9 Reuters. The Goodyear logo is seen at a tire workshop in Caracas, Venezuela December 10, 2018. REUTERS\/Manaure Quintero<\/span>
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By Svea Herbst-Bayliss<\/p>\n

(Reuters) – Activist investor Elliott Investment Management L.P. disclosed a large investment in Goodyear Tire & Rubber Co on Thursday and said it wants the company to strengthen its financial position by refreshing the board, selling its stores and conducting an operational review.<\/p>\n

Elliott holds a 10% stake in the 125-year-old company, making it one of Goodyear’s biggest investors. The investment firm, which manages $55 billion in assets, is proposing that five new directors join the 12-member board.<\/p>\n

Goodyear can use proceeds from selling the store network to pay down debt, improve its balance sheet and financial flexibility, Elliott said in a letter to the board, which it made public.<\/p>\n

All of Elliott’s proposed changes could boost Goodyear’s stock price about $21 to the low-$30 range, it said. On Thursday afternoon, the stock jumped 19% to $14.05. Over the last five years the stock has fallen 47%, with a 50% loss in 2022.<\/p>\n

Elliott, which has a history of taking board seats at companies including Twitter and eBay (NASDAQ:), said it has identified “experienced executives to spearhead” a board overhaul.<\/p>\n

Elliott declined to name the candidates and said it hopes to engage constructively with Goodyear.<\/p>\n

The company said its board and management team “have a strong track record of making value-enhancing strategic decisions on behalf of shareholders” and regularly reviews its strategic plan to ensure that “Goodyear is best positioned to deliver strong, sustainable shareholder value.”<\/p>\n

Elliott criticized Goodyear, valued at $3.3 billion, for mismanagement and lagging its rivals, Michelin <\/span><\/span> (EPA:) and Bridgestone. Despite its long history, Goodyear has “failed to deliver on expected financial performance,” Elliott said. Market sentiment is “profoundly negative”, leaving the stock “orphaned” with only a small number of analysts covering the company, the firm said.<\/p>\n

Over the last five years, Elliott said, the number of Goodyear’s auto service stores has shrunk while its peers have expanded. It projected that the Goodyear-owned store network could be worth as much as the entire company under proper management.<\/p>\n

As one of the world’s biggest activist investment firms, Elliott often directly negotiates changes with a target company and avoids running costly and time-consuming proxy contests.<\/p>\n

“Our recommendations \u2013 enhancing leadership and oversight, monetizing Goodyear’s retail platform, and developing a margin improvement plan \u2013 will make Goodyear a better company for its customers, employees and shareholders for decades to come,” Elliott portfolio managers Marc Steinberg and Austin Camporin wrote to the company on Thursday. <\/p>\n

(Graphic: Goodyear shares suffer vs peers – https:\/\/fingfx.thomsonreuters.com\/gfx\/ce\/lgvdkeqkxpo\/Pasted%20image%201683822223516.png) <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. The Goodyear logo is seen at a tire workshop in Caracas, Venezuela December 10, 2018. REUTERS\/Manaure Quintero By Svea Herbst-Bayliss (Reuters) – Activist investor Elliott Investment Management L.P. disclosed a large investment in Goodyear Tire & Rubber Co on Thursday and said it wants the company to strengthen its financial position by refreshing […]<\/p>\n","protected":false},"author":1,"featured_media":3590,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-7576","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nActivist investor Elliott pushes for changes at Goodyear, shares jump | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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