Activist investing is detrimental to the economy because it doesn’t encourage a long-term view, said Martin Lipton, founding partner at New York law firm Wachtell Lipton Rosen & Katz.
“With activism, we are not doing the long-term investments, the long-term planning to collectively grow companies and the economy,” Lipton said today at the Bloomberg Dealmakers Summit in New York. Lipton participated in a panel on activist investors with Barry Rosenstein, managing partner at Jana Partners LLC.
For example, Carl Icahn’s investment in Clorox Co. hasn’t been beneficial to shareholders, Lipton said. Clorox declined the most in more than a month yesterday after Icahn withdrew a slate of directors for the company and said shareholders wouldn’t support his plan for a sale.