Activist Keith Meister Discusses Mergers, Active Management, Pandora, and More

Tesla Should Focus on its Core Business

Keith Meister thinks that Tesla Motors Inc (NASDAQ:TSLA)’s planned acquisition of SolarCity Corp (NASDAQ:SCTY) depicts “limited strategic rationale” because it comes at a time when the electric car maker should be focusing on its core business. In August, Tesla said that it had reached a deal to buy the energy services company for $2.6 billion. Meister said that being the largest electric car maker should seem like a full-time job. A total of 36 hedge funds in our database owned shares of Tesla Motors Inc (NASDAQ:TSLA) as of the conclusion of the second quarter.

Twitter’s Acquisition Fell Apart Because of Shareholders

One reason a Twitter Inc (NYSE:TWTR) sale could not be realized was that shareholders of its potential suitors, which reportedly included Alphabet Inc (NASDAQ:GOOGL), salesforce.com, inc. (NYSE:CRM) and Walt Disney Co (NYSE:DIS), were vocally opposed to their companies buying the social media firm. Meister thinks that companies in today’s capital markets listen to their shareholders, and that it is a “wonderful” thing. He said the management of each suitor had an active dialog with its shareholders over acquiring Twitter, and that they listened to the response they got, which was reluctance and questions over the feasibility of spending a large amount for the company. Meister believes that what happened in that scenario is a great example of one of the benefits of active management as opposed to passive. 30 hedge funds tracked by Insider Monkey were bullish on Twitter Inc (NYSE:TWTR) at the end of the second quarter.

Williams Companies Is Worth More as a Part of Another Entity

The founder of Corvex Capital also talked about Williams Companies Inc (NYSE:WMB), from whose Board of Directors he recently resigned. He said that the company has “undermaximized” its opportunities over the past five years and thinks that Williams Companies could be worth more as part of another entity. In August, Meister said he planned to nominate candidates to replace the pipeline company’s entire board. Meister left the board earlier this year after Williams’ failed deal to be acquired by Energy Energy Transfer Equity LP (NYSE:ETE). Eric W. Mandelblatt’s Soroban Capital Partners 21 million shares of Williams Companies Inc (NYSE:WMB).