- Hedge-fund billionaire Dan Loeb’s Third Point Capital disclosed a stake in American Express, according to a report.
- Loeb believes American Express will trade above $135 over the next 18 months — 25% above where shares were trading on Friday.
- Years of lagging performance galvanized the American Express franchise and „forced necessary investments,“ Loeb said.
- Watch American Express trade in real time here.
American Express recovered most of its loss on Friday after hedge-fund billionaire Dan Loeb’s Third Point Capital reportedly disclosed a stake in the company. Shares erased their loss of 1% after the news crossed the wires.
According to a letter seen by CNBC, Loeb added a stake as he sees the stock „trading above $135 over the next 18 months“ — 25% above where it was on Friday.
„New CEO Stephen Squeri is re‐energizing Amex by focusing on topline growth and under‐appreciated structural opportunities in Commercial and International,“ Loeb said in the letter, according to CNBC.
Over the past four years, American Express, which is the fourth-largest payment network in the world with $1.2 trillion in business, has lost branding partnerships with JetBlue and Costco, and faced more and more competitions from other credit cards, but Loeb believes the credit card company still has good fundamentals.
Years of lagging performance „galvanized the franchise“ and „forced necessary investments,“ the letter said.
Loeb has been known for putting pressure on companies that he thinks are underperforming.
In October, Third Point called on shareholders to replace Campbell Soup’s board of directors. And in July, he called for the food group Nestle to divide into three units, spin-off non-core businesses, and appoint an outsider with food and beverage expertise to its board. Previously, he has led turnarounds at Dow DuPont, Yahoo, and Sotheby’s.
American Express was up 9% this year.
Source: Business insider