Einhorn Ratchets Up His Pressure on GM -- Update
April 12 2017 - 11:10AM
Dow Jones News
By Anne Steele
Investor David Einhorn escalated his pressure on General Motors
Co., nominating three candidates Wednesday to the Detroit auto
maker's board of directors.
In a public filing, Mr. Einhorn's hedge fund Greenlight Capital
Inc., which is pressing GM to create two classes of common stock
that would separate its dividend from its operations, said the
nominees are needed "to help re-energize the board and bring
additional focus to closing the valuation gap in GM's stock."
GM has rejected the stock-split proposal, saying it "creates an
unacceptable level of risk," including the potential loss of its
investment-grade credit rating. The auto maker said Wednesday its
evaluation of the proposal remains unchanged. All three major
ratings firms last month issued reports on the Greenlight proposal
saying it would be credit-negative to GM and could lead to a
downgrade.
GM said credit-rating firms' public statements on the Greenlight
proposal "clearly indicate that they understood the idea in all its
facets."
Mr. Einhorn has been pressing GM as he seeks to invigorate a
stock that has languished despite climbing sales and profits. His
theory is that two classes of stock would attract new yield-hungry
investors and those looking for growth.
Greenlight named as candidates Leo Hindery Jr., managing partner
of InterMedia Partners and former chief executive of
Tele-Communications Inc., Liberty Media and AT&T Broadband;
Vinit Sethi, partner and director of research at Greenlight; and
William N. Thorndike Jr., founder of private-equity investment firm
Housatonic Partners and chairman of Consol Energy.
GM shares were up 0.2% Wednesday morning.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
April 12, 2017 10:55 ET (14:55 GMT)
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