Well, looks like Pfizer just avoided a potential bloodbath—or atleast a really annoying shareholder meeting. Activist investor Starboard Value, known for rolling into boardrooms like the Kool-Aid man, decided not to nominate any directors to Pfizer’s board ahead of the January 25 deadline. This doesn’t mean they’re done stirring the pot, but for now, Pfizer’s CEO Albert Bourla can take a deep breath and get back to figuring out why the company’s stock chart looks like a ski slope from hell.

(Source: Giphy) 

ICYMI, Starboard, led by professional agitator Jeffrey Smith, has been coming for Pfizer hard since last fall, accusing the pharma giant of blowing billions on bad M&A deals and failing to turn its COVID windfall into anything resembling shareholder value. Starboard built a $1 billion stake in Pfizer, essentially buying themselves a VIP pass to complain about everything from R&D returns to Bourla’s choice of ties. The hedge fund claims Pfizer has erased $20 billion in market value since 2019 despite banking $40 billion in pandemic dough. Translation: “You had one job, and you still blew it.”

Starboard's biggest complaint? Pfizer’s capital allocation strategy—or lack thereof. Since 2022, Pfizer has spent a whopping $70 billion on acquisitions, including the $5.4 billion purchase of Global Blood Therapeutics, which quickly went sideways when the centerpiece drug got pulled from global markets. Oh, and let’s not forget the $43 billion Seagen buyout, which Starboard says is a long shot when it comes to delivering the promised eight blockbuster cancer drugs by 2030. Basically, Starboard’s argument boils down to Pfizer’s shopping spree sucked, and they want a refund.

(Source: Fierce Pharma) 

But, but, but… instead of storming the boardroom with their own nominees, Starboard chose to sit this one out—for now. Maybe they’re biding their time until the 2026 director vote, or maybe they realized that going toe-to-toe with Pfizer’s board is like trying to win a karaoke contest against someone who brought their own mic. Either way, the decision gave Pfizer stock a much-needed breather, jumping 3% on the news. Not exactly a moonshot, but hey, when your stock is down 56.5% from its 2021 highs, you take any win you can get.

(Source: IBD) 

What’s more is that Bourla is clearly trying to dial down Starboard's intentions. Speaking at the J.P. Morgan Healthcare Conference earlier this month, he dismissed Starboard’s critiques as minor gripes and insisted the company had “exceeded” its goals in 2023. Bold words for a guy whose company missed sales expectations in three of four quarters last year, largely thanks to the COVID product nosedive. His five-point turnaround plan—focused on pipeline improvements, cost-cutting, and squeezing more juice out of new products—sounds great on paper, but Wall Street’s patience is wearing thinner than mine when my wife has had five nights of “headaches” (Iykyk).

(Source: Giphy) 

Now with that said, even though this whole dumpster fire hasn’t come to a head yet, don’t think for a second that Starboard is going to slip away quietly. Remember, this is the same rag-tag team of vigilantes that spent months trying to derail Bristol Myers Squibb’s $74 billion Celgene buyout and recently took a stake in Johnson & Johnson’s consumer health spinout, Kenvue. Meaning, they aren’t here to make friends–they’re here to “F’ish up”, and Pfizer’s underperformance wreaks of blood in the water. 

So what’s next? Well, if Pfizer can’t prove it knows how to spend its billions wisely—or at least get its stock price out of the gutter—Starboard will be back, and they’ll bring receipts. For now, Bourla has a little breathing room, but the clock is ticking. And let’s be honest: If your turnaround plan includes “maximizing products,” you might as well add “find a four-leaf clover” while you’re at it.

(Source: Giphy) 

In the end, sure, Pfizer may have sidestepped a major proxy fight this time, but the real fight—justifying its strategy to increasingly pissed–off investors—is far from over. So with that, do your due diligence and place your bets accordingly, friends. As always, stay safe and stay frosty! Until next time… 

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Stocks.News holds positions in Johnson and Johnson as mentioned in the article.