We disagree with these activists: GameStop and Bausch Health

Article Excerpt

We keep an eye on the actions of activist investors; like us, they seek out companies with undervalued assets that they can sell or spin off to boost their value. However, looking at GameStop and Bausch, we don’t share the enthusiasm of their prominent activists. GAMESTOP CORP. $210 is a sell. The company (New York symbol GME; Consumer sector; Shares outstanding: 69.8 million; Market cap: $14.7 billion; No dividend paid; Takeover Target Rating: Medium; www.gamestop.com) is a specialty retailer that sells new and used video games and video game consoles through its 5,000 stores in 10 countries. It also sells games online. The stock has soared roughly 1,000% since the start of 2021 due to heavy buying by individual speculators. They have targeted companies with large short-selling positions (like GameStop) and have pumped them up on social media platforms like Reddit’s online chat forums. Investors are also hopeful that the company will benefit from activist investor Ryan Cohen, who owns about 10% of the company’s shares and…