From celebrities to politicians, it appears everybody has a podcast lately. Now, even hedge funds are branching out into the medium in an effort to seize the eye of shareholders. Earlier this week, Elliott Administration, the formidable activist fund based by billionaire Paul Singer, launched a podcast devoted to its aggressive marketing campaign at Southwest Airways. Titled “Stronger Southwest,” the sequence is geared toward bolstering the agency’s efforts to enact management modifications on the airline. The transfer can be a part of a pattern of shareholder activists looking for to be extra media-savvy of their messaging.
Elliott revealed its 11 % stake in Southwest in June and has spent the previous few months pushing for a slew of modifications on the airline, which has misplaced half of its market worth prior to now three years. Along with urging Southwest’s CEO Bob Jordan and government chairman Gary Kelly to step down, Elliott is seeking to exchange the airline’s board of administrators with eight of its personal nominees. On Oct. 14, it referred to as for a December particular assembly of shareholders to vote on its candidates.
The next day, Elliott launched the primary episode of ‘Stronger Southwest,’ which options conversations with the activist investor’s nominees. “At the moment’s launch of an progressive new podcast sequence will supply shareholders a possibility to study extra about these uniquely certified nominees,” mentioned the fund in an Oct. 15 press launch.
The primary episode facilities upon nominee Gregg Saretsky, whose profession within the airline trade has included stints as CEO of WestJet and vice chairman of selling at Canadian Airways. “The issues that we needed to do in these days, with respect to taking a deep dive and searching actually critically at points of our enterprise, I feel are issues that very a lot must occur at present at Southwest,” mentioned Saretsky in the course of the 18-minute program. The episode has racked up practically 3,000 views on YouTube and can be out there on Spotify and Apple.
Southwest, for its half, has described Elliott’s calls for as excessive and pointless. The fund’s name for a particular shareholders assembly “seems designed to maximise disruption as we method one of many busiest journey intervals of the 12 months,” mentioned CEO Bob Jordan in an Oct. 15 video message. “This isn’t a battle ‘in opposition to Elliott.’ This can be a battle for the way forward for Southwest Airways.”
Will podcasts grow to be the brand new norm in shareholder activism?
Elliott’s podcast is a “novel tactic” in investor activism, based on Kevin Kaiser, a finance professor on the College of Pennsylvania’s Wharton Faculty. “That mentioned, I feel it is a superb method which can allow shareholders to listen to from the nominees prematurely of their vote,” he instructed Observer.
Whereas ‘Stronger Southwest’ could also be an unprecedented use of podcasting, it follows more and more media-heavy methods utilized by hedge funds. Elliott additionally has a web site devoted to its Southwest marketing campaign, along with a 51-page digital presentation and social media presence throughout platforms like Instagram, X and Fb.
The brand new sequence might be notably efficient given Elliott’s tight timeline. The agency goes to want “substantial shareholder help” to name its December assembly, mentioned Szu-Yin Wu, an assistant finance professor on the College of Buffalo. A podcast might be an impactful approach of breaking down the activist investor’s advanced calls for in a fascinating and handy format, she instructed Observer.
As for whether or not podcasts will grow to be a brand new pattern in shareholder activism? “It’s attainable,” mentioned Wu. As a result of its accessibility, the medium permits “shareholders to interact with activism messages whereas driving or exercising, which might be notably efficient in reaching smaller, particular person buyers, and the corporate’s present workers.”
