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- Update 3:10pm: Adds Shell response.
- Royal Dutch Shell (NYSE:RDS.A) rose 1.4% after Dan Loeb's Third Point took a stake in the oil giant and wants the company to separate into "multiple standalone" companies, according to an Q3 investor letter viewed by Seeking Alpha.
- Third Point is said to have taken a stake of well over $500M, according to an earlier WSJ report.
- The activist investor is pushing the oil mega to create a company that houses its legacy refining business and another business that will hold its renewables and other units.
- "While daunting, there is perhaps no bigger ESG opportunity than in “Big Oil”, and specifically, at Royal Dutch Shell," Loeb wrote in the letter. "We are early in our engagement with the company but are confident that Shell’s board and management can formulate a plan to accelerate decarbonization while simultaneously improving returns for its long-suffering shareholders."
- Shell said that it welcomes open dialogue and that it's investor relations team has had preliminary conversations with Third Point, according to a statement. The oil giant will be releasing its Q3 earnings tomorrow.
- The pressure from Third Point comes after activist investor Engine No. 3 has targeted Exxon Mobil (NYSE:XOM) over ESG concerns. Last week, the WSJ reported that Exxon is debating whether to continue with several major oil and gas projects, amid some suggestions from Engine No. 3 board members.
- Separately, Third Point also discussed its position in UnitedHealth (NYSE:UNH) in the Q3 letter, a position that the activist initiated last year during the Presidential election period. Third Point believes UNH's stock could double in the next 3 to 4 years.
- Third Point also discussed a small private investment in electric vehicle maker Rivian (RIVN).
- "Rivian stands out with a compelling brand, an excellent first vehicle, and a unique partnership with Amazon that allows them to scale quickly," Loeb wrote in the letter.
- Third Point also said the hedge fund has increased the number of single name shorts in its portfolio. During Q3, Third Point returned +12.5% in the flagship Offshore Fund, bringing year to date returns to +29.5%.
- The top five winners for the quarter were Upstart Holdings (NASDAQ:UPST), SentinelOne (NYSE:S) Prudential PLC (NYSE:PUK), Danaher (NYSE:DHR) and Avantor (NYSE:AVTR). The top five losers for the quarter were Paysafe (NYSE:PSFE) Social Finance (NASDAQ:SOFI) Didi Global (NYSE:DIDI) Uber Technologies (NYSE:UBER) and Burlington Stores (NYSE:BURL).
- Recall earlier this month, EV maker Rivian files for initial public offering.