When a billionaire hedge-fund manager becomes the majority shareholder of a company, everybody listens when that individual speaks up and expresses their concerns regarding the direction of the firm.
Dan Loeb, the CEO of Third Point, may not know a lot about how the art-auctioning business works. But his track record indicates that he does know a thing or two about how a company should act to best represent the interest of its shareholders.
Now that Loeb controls 6.35 million shares Sotheby’s and wants its chairman, William Ruprecht, to resign ASAP, the heat is on. He expressed his sentiments by sending a letter to the organization’s management, reports Forbes.com.
In a nutshell, Loeb feels that Reprecht has lost his relevance and is out of touch with auction house’s shareholders. He also believes that too much money is being wasted by Mr. Ruprecht on superfluous activities, such as lunches, country club memberships, chartered jets, and other activities that detract from instead of enhancing Sotheby’s profitability.
….Loeb hit Ruprecht and his team where it hurts. Speaking of management’s lack of alignment with shareholders, the hedge fund manager noted Third Point’s stake represents nearly ten times the number of fully vested shares held by directors and executive officers.