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May 12, 2023

The week in IR: Elliot pushes for company review of Goodyear, Google rolls out AI to core engine and Toyota urged to improve ESG disclosures

Our pick of the IR stories from around the web you might have missed this week

– Billionaire activist investor Paul Singer’s Elliott Investment Management said it’s built a 10 percent position in Goodyear Tire & Rubber and is pushing for asset sales and an operational review, according to Bloomberg (paywall).

Goodyear should appoint five new independent directors and explore a divestment of its company-owned store network, Elliott said in a letter to the company’s board on Thursday. Making changes could help boost Goodyear’s share price to more than $32, nearly triple its last close, Eliot added.

Goodyear is reviewing Elliott’s recommendations and intends to meet with the firm to discuss its views in more detail, the company said in a statement.

– Wall Street has eagerly rallied around companies making notable strides in AI. But several investors warn that the increasingly widespread deployment of AI has opened a Pandora’s box of concerns about ESG, reported CNBC.

Generative AI models such as ChatGPT have already been implemented in technical roles, such as financial analytics and drug development, as well as more human-facing sectors such as customer service and marketing. Amid the quick rise and implementation of AI across these industries, some investors worry the potential ESG downsides haven’t been adequately considered and safeguarded against. 

– According to the BBC, Google announced it is rolling out generative AI to its core search engine. The move comes after Microsoft incorporated GPT-4 into its Bing search engine earlier this year. Additionally, the company announced that a new feature on Google’s Android system will proactively warn users about unknown AirTags, tiny devices developed to track personal items like keys and wallets. The technology giant said the ‘unknown tracker alerts’ would go live this summer.

Google made the announcement at its annual developer conference, where leaders of the company touted their latest advancements in AI and new hardware offerings, including a $1,799 phone that opens and closes like a book. The company said it was removing the waitlist for Bard, its experimental, conversational, chat service, which will now be rolled out in English in 180 countries and territories.

– British drugmaker GSK offloaded around 240 mn shares of its spun-off consumer healthcare group Haleon in a move that raised £804 mn ($1 bn) for the firm, according to City AM.

The share sale represents around 2.5 percent of the consumer healthcare group’s issued share capital. GSK is the second-largest shareholder of London-listed Haleon and said it will still hold 955 mn ordinary shares in it after the sale, representing approximately 10.3 percent of the issued share capital of Haleon. The firm also said it had ruled out any further share sales for a period alongside top shareholder Pfizer, which holds a 32 percent stake in Haleon.

– Around two thirds of sell-side clearing managers do not support the EU’s recent proposals to implement active account requirements for euro-denominated swaps under Emir 3.0, according to The Trade.

The process of direct connectivity or single-dealer platforms allows a buy-side institution to directly connect to a smaller handful of brokers, or even one sell-side broker. Many argue that the process reduces impact as firms are not revealing their hand to the wider market. The argument can also be made that it reduces costs firstly by removing the need for firms to pay fees to trading venues and secondly because it gives them greater control over their valuable transaction data.

– A trio of European asset managers submitted a shareholder proposal urging Toyota to improve disclosure of its lobbying on climate change, likely the first time such a resolution will go before the Japanese automaker’s investors, Reuters (paywall) reported.

The move by the three funds, which collectively hold shares in the world’s biggest automaker worth around $400 mn, highlights the pressure new CEO Koji Sato faces from green investors and climate activists over the company’s environmental lobbying. Toyota’s board on Wednesday recommended shareholders vote against the resolution, to be put to the company’s AGM in June.

The Japanese firm was once the undisputed global leader in environmentally friendly cars with the Prius hybrid, but more recently it has been criticized as slow to embrace battery-powered electric vehicles.

Staff Writers

The staff writers on IR magazine are from our team of highly experienced journalists.