I had a little debate with my colleagues about it, so I wonder what you think. Will Allstate be sold in the near future? And why do you think that?
Despite everything, I don't think it will, at least not in the next few years.
9 replies (most recent on top)
Icahn is an activist investor. He need not own more than 1% to exert his influence, as other stockholders will follow his lead for one simple reason - he sells shares at a price higher than the stock price. That is what usually happens when a company is bought out. Company is doing poorly - stock price is low - investors buy up the stock and then when the company is sold, they get a higher price. May be nonsense to some of you, but there are lots of investors who have become rich off of that nonsense.
But Ichan is going to sell the company, all 1% he owns... This site just proves Allstate employs nothing but mo--ns
Stop with the Ichan nonsense. He owns 1 percent of company and increased his investment 50 percent in the last year since he invested.
He has no say in the company bring sold nor does he seem to have a financial interest other than any buyer will absolve shares at a rate a little higher than the stock price
Yes, all signs of a sale are coming soon. Reserves are being released before year end. Increased loss ratios still continue to climb despite all the cost cutting it was clearly not effective
Icahn can force an effort to sell Allstate. He cannot, however, force a buyer to act.
In the end the Allstate purchase calculation will be focused on the cost and pace of customer acquisition since that is all Allstate really offers. Even the brand name seems to be tarnished.
Agreed. If it happens, it will be in a few years. Stock price is high, even with the drop after 3rd qtr results. That said, the company seems to be stagnant despite (or maybe because of) TG. If stock slides, or does not keep up with competitors, then I expect you'll see Icahn (and maybe others like him) force a sale.
Right now the stock is too high as it is for many companies. If one were to buy Allstate, it would be for so few of its pieces. Technology? No. Leadership? No. Innovation? No. Operational Excellence? No.
The reason to buy Allstate would be to buy its customers only. And since Allstate competitors are already increasing market share, it may not be cost effective to buy market share. Growing market share organically for Allstate competitors may prove more cost effective and yield a better book of customers.
Allstate seems focused on increasing margins on a steady or decreasing book of business to maintain bottom line growth while foregoing competing for top line growth. This is the same strategy GM is trying. It will work until the market shifts to offerings that a calcified company cannot quickly bring to market.
Insurance companies are naturally high inertia because of regulation, lack of consumer true understanding of the product and pricing in the main, and a fairly concentrated group of insurers limiting true options.
All this argues against anything happening in the near of mid term. Just a guess.
Yes. Icahn is setting up this sinking ship for a sale. He will chop it up and sell it. There is NO future in Allstate.
Likely not. Stock price is too high compared the company's actual value. Maybe if it really tanks.