Corvex Management and Carl Icahn
On January 7, 2016, the New York Post reported that activist shareholder Corvex Management could be building up its stake in Time Warner (TWX). The New York Post report states that Keith Meister owns Corvex Management and until 2006, he was a protégé of Carl Icahn. Carl Icahn is an activist investor who tried to gain control of Time Warner in 2006.
According to another Reuters report dated January 12, 2016, citing unnamed sources, Carl Icahn is also building up a stake in Time Warner. However, Carl Icahn later stated, “I have no position in Time Warner. No options, no forwards, no stock.”
According to the Reuters report, other activist investors that hold a stake of 0.5% each in Time Warner include Corvex Management, Jana Partners, and Greenlight Capital.
Time Warner’s share price has risen by 7.6% since the start of the year. Time Warner had a market capitalization of $55.7 billion on January 18, 2016. Time Warner consists of the Turner, Home Box Office (or HBO), and Warner Bros. business segments.
What are activist investors?
An activist investor is an entity that accumulates shares of a company, usually 5% or more, with the intention to influence changes in the company. This may also allow the investor to gain a seat on the company’s board of directors. An activist investor usually believes the company is not performing to its fullest value and his or her participation can help a company unlock the upside for investors.
Time Warner makes up 0.3% of the iShares Russell 1000 Growth ETF (IWF). For an investor interested in exposure to the Computers sector, IWF holds 5.8% of the sector. IWF also holds 5.7% of Apple (AAPL), 2.4% of Microsoft (MSFT), and 2.2% of Amazon (AMZN).