Long-Term Returns of David Einhorn’s 5 Activist Targets

2. Civeo Corporation (NYSE:CVEO)

Activist Investment: 2014
Long Term Returns: -64%
S&P 500 Average Gain: 15%

Civeo Corporation (NYSE:CVEO) is a company that offers accommodation and hospitality services to Canada’s oil and gas industry. It develops lodges, villages, and mobile assets, including modular, skid-mounted accommodation and central facilities for short- to medium-term accommodation needs. Einhorn took a stake of nearly 10% in the company in 2014.

Following the investment, the activist investor conversed with the board and management, urging them to replace the CEO and leverage the balance sheet to return profits to shareholders. According to the activist investor, the CEO had lost the support and confidence of shareholders.

In regulatory filings, Greenlight Management asked Civeo Corporation (NYSE:CVEO)’s board to take on leverage and make its capital structure more appropriate for a real estate company. Civeo Corp had sought to transform into a real estate investment trust after coming under pressure as oil prices plunged in the second half of 2014.

Einhorn publicly objected to the REIT plan in October and consequently became an activist. He started unloading his stakes in the company in 2015 after conceding in the fourth quarter of 2014 that he had misunderstood the company’s business and how it would react to falling commodity prices.