In Nook and AOL Wins, a Kinder, Gentler Activist Emerges (Update 1)
NEW YORK (TheStreet) -- Carl Icahn and the old guard of corporate raiders may still prefer the second hand of a watch to the calendar as the primary mechanism for plotting investments, but it's a more deliberate type of activist fund that is walking away with big profits in targeting of stock market laggards.
Roughly ten years into a gradual decline of their respective dial-up internet and bookselling businesses, AOL(AOL) and Barnes & Noble(BKS) are surging in 2012. Microsoft(MSFT) has played a major role in both cases, buying AOL's patent portfolio -- which may give AOL the cash it needs to shift course, and creating a joint venture with Barnes & Noble's to spin off the Nook E-reader -- which may provide Barnes & Noble with the partner it needs to survive in the intensely competitive E-reader and tablet war.
|A kinder, gentler activist helps turns Barnes & Noble into a page-turner in 2012.|
And at first glance, the 35%-plus share gains of AOL and Barnes & Noble in 2012 show that companies can be pushed to accelerate strategy changes by monetizing assets in coordination with a deep-pocketed partner.
However, it is the emergence of large activist investors Starboard Value and Jana Partners behind the scenes of these stock market turnaround stories -- companies that had seemingly lost Web-battles to more adept technology giants like Google(GOOG) , Apple(AMZN) and Amazon(AMZN) -- that offers a larger lesson in how investors identify and plan stakes in low-priced companies requiring radical change.