Activism At CA

A decade ago CA was the third largest independent software company in the World and the company has woefully underperformed since. As long time readers know I believe shares of CA Technologies are extremely undervalued.  I even went to the CA Investor Conference a few months back and let the CEO know how I felt. It seems somebody far more powerful than myself has taken notice of CA's unrealized value.

Walter Haefner, is a Swiss billionaire, who sold his company to CA in 1987 and now holds approximately 25% of the shares. In 2001 he defended management when they faced a proxy battle from an activist shareholder. Very quietly late this Friday, CA announced a new addition to the board that just happened to be another Swiss citizen. Why after nearly 25 years is CA's largest shareholder looking for representation on the board?

During the CA Investor Conference I was happy to hear that management was done making large acquisitions, although I was surprised as it seemed out of character. It was a break from their previously stated strategy of making a few acquisitions a year. Putting all the pieces together it seems to me that they are feeling pressure from somewhere.  My best guess is that their largest shareholder is fed up, as most would be after 25 years


Anonymous said...

The CBOE equity put/call is remarkably sudued (.72). Given the action I'd expect a number close to 1.00.
Are you seeing a different fear level on the put/calls you follow?

Tsachy Mishal said...

Overall CBOE is showing a lot of put activity as is ISE. I have little doubt that people are very negative right now. This is all about getting a less than disastrous outcome from Europe. if we can get that there will be a massive rally.