Investor Mayhem

Case Prompt

Your client is a large ice cream company with multiple business units including bar, tub and cone products. Your client is under pressure from a high-profile investor that has built a 10% stake in the company. The client has asked you to help predict the new investors likely demands that could increase stock price or company performance.
What are your ideas to deliver short-term and long-term value back to the shareholder?
Investors: An individual or group that purchases large amounts of a public company's shares and/or tries to obtain seats on the company's board with the goal of effecting a major change in the company. The investor benefits when equity prices rise significantly or dividends are paid.
This case is meant to have interviewer guidance. Provide less guidance for advanced candidates; allow them to drive and explore.

Clarifying Information (If Prompted)

This case challenges the candidate to think from the investor and company perspective, balancing short-term & long-term objectives. Success requires the candidate to correctly evaluate the financial options and give a recommendation that is operationally realistic.
An activist investor is looking for an increase in stock price, and the client is looking for this plus long-term success. Frameworks should incorporate some of the following:
- Short-term Value
  - Sell a business unit (split off a whole business, brand, or geography)
  - Cost save (delayer company, shut-down plants)
- Long-term Value
  - Restructure product supply, move to low-cost countries
Award bonus points for strong options that may create shareholder value. Ensure the candidate understands what an activist investor targets and the likely time horizon (1–2 years).
It is important to know that activists may want short-term actions that company disagrees with due to long-term effects.