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Nelson Peltz May Be Right About DuPont

Scene Last Night: Jeffrey Immelt,   Nelson Peltz,   Courtney Love

 

Nelson Peltz is an activist investor who likes to shake things up at a company once he buys a significant stake. However, often when there is news that an investor has taken a position in a company, buyers may stay away, because the story is over. Not so in the case of Peltz, says CNBC’s Jim Cramer on Mad Money, who is an activist investor worth “piggy backing” off of long after the position has been announced.

Peltz’s Trian Fund is launching a proxy battle in the case of DuPont and has nominated 4 prospective candidates for the company’s board. His ultimate plan is to split up the comglomerate into smaller segments so it will be easier for Wall Street analysts “to understand.”

Cramer says on Mad Money, “I think this is the most important proxy fight we’ve seen in ages, because if history is any guide, Peltz’s involvement could send DuPont’s stock much higher, whether or not he actually wins the proxy fight.”

Peltz has been discussing a spin off for DuPont for a while, and although management has cut costs and streamlined operations, Peltz, like many activist investors, is looking for more from DuPont. Peltz wants one segment that will deal with nutrition, agriculture and health, and a cyclical business geared towards performance materials and electronics.

Whether it really happens or not, Peltz is going to use his 24.4 million share position to make some changes, and if they don’t pan out, the stock is likely to go higher.

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