Yesterday, hedge-fund activist investor Daniel Loeb did for aesthetic-laser maker Candela
If you're familiar with any of Loeb's tirades, you know that Candela's management can't be sitting too comfortably right now. Loeb has a penchant for moving in on a distressed company and shaking things up.
A few years ago, Loeb chewed out the CEO of Star Gas
Sadly, your ineptitude is not limited to your failure to communicate with bond and unit holders. A review of your record reveals years of value destruction and strategic blunders which have led us to dub you one of the most dangerous and incompetent executives in America. (I was amused to learn, in the course of our investigation, that at Cornell University there is an "Irik Sevin Scholarship." One can only pity the poor student who suffers the indignity of attaching your name to his academic record.)
Loeb called for his ouster, and the CEO subsequently resigned. This past February, Loeb also chastised Pogo Producing
While we are disappointed in the results achieved under your leadership, we continue to believe the Company's assets are valuable and under-utilized. Hiring Goldman, Sachs & Co. and TD Securities Inc. to help the Company explore strategic alternatives is a positive step, but we have no faith in the current board's ability to oversee such a process.
One can only imagine the great fun Daniel Loeb could have with Candela's CEO. As anyone who's read the coverage of Candela here knows, Gerard Puorro has a knack for bluster, and for playing fast and loose with the facts. He's urged analysts to wait for "white hot" laser sales that never materialized; he's used some fuzzy math to claim Candela was stealing market share, even as its sales were declining; and he's denied that Palomar Medical Technologies
Increasing rumblings among investors and observers argue that Candela's management must change in order for the company to advance. As a shareholder in the laser maker, I'd certainly support a change. Loeb could make it happen, though he might also opt for another of his tactics by installing friendly board members. He did that recently with Nabi Biopharmaceuticals
By making his sizeable acquisition of shares, however, Loeb has signaled to management that he has focused his attention on the laser maker. While the filing indicates it's a "passive" investment, I imagine Candela has taken notice of his activist tendencies, and they'll be watching with interest. As will we all.
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Fool contributor Rich Duprey owns shares of Candela but does not have a financial interest in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.