Does the fact that an earnings-per-share figure has not meaningfully
improved over, say, five years justify an overhaul pushed by a hedge-fund
activist investor? Put another way, is a
steady earnings-per-share tantamount to failure? Especially for an established
company, steady numbers do not evince bad performance. An airline would only
foolishly fire a pilot for not climbing once having attained a cruising altitude.
Maintaining such an altitude during a flight is hardly a reason to turn a plane
around or set it in a radically different direction.
Dan Loeb of Third Point. Relax, Dan, Nestle is not on a nose-dive.
The full essay is at "Hedge Fund Activist."
