MONEY Odd Spending

‘The Interview’ Poster Now Listed at $1,000 on eBay

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Would you pay $1,000 for this poster? © Columbia Pictures—courtesy Everett Collection

After Sony cancelled the release of the controversial Seth Rogen movie The Interview, some collectors are thinking posters of the film are worth big bucks.

The Interview may make no money whatsoever at the box office, and it could wind up costing Sony Pictures over $100 million after the decision was made this week to cancel all screenings amid widespread threats to theaters. Still, the film—a comedy that depicts the assassination of North Korea leader Kim Jon Un, and which appears to be the impetus for North Korea’s involvement in a devastating hack of Sony, the production company behind it—could wind up earning some folks a pretty penny.

The Huffington Post noticed on Thursday that posters from the canceled movie had begun surfacing for sale on eBay, with asking prices in the neighborhood of $500. Pop culture experts forecast that these posters will be worth “$15, maybe $20″ in a year, when, presumably, all the hubbub about The Interview and the Sony hack are old news.

Still, this hasn’t stopped entrepreneurs from trying to milk the movie’s moment in the spotlight for quick and easy profits. At last check on Friday, there were around 500 results on eBay for “The Interview Poster.” Some sellers are asking $1,000 or more for vinyl 5′ x 8′ posters of the controversial film.

The highest price paid on eBay for one of the posters appears to be $787 for a 27″ x 40″ double-sided theatrical print that received 59 bids in an auction that ended on Thursday. The market appears to cooling off significantly, however. As of Friday morning, very few posters listed at eBay auction had been bid up beyond $250, and dozens of new listings had no bids whatsoever.

MONEY Shopping

New Moves by 3 Tech Giants Aim to Get a Bigger Piece of Your Wallet

Apple Pay
Bryan Thomas—Getty Images

Google, Amazon, and Apple are all pushing new tools—and often, encroaching on the turf of competitors—with the hopes of snagging a larger cut of everyday consumer purchases.

Several of the world’s tech giants are squaring off, thanks to new strategies and tools that have one common goal: to bring their respective companies a bigger slice of the enormous consumer spending pie.

Google vs. Amazon

This week the Wall Street Journal reported that Google is working on a “Buy” button that would allow online shoppers to make quick one-click purchases—a feature that’s most often associated with Amazon, the world’s largest e-retailer. Google wouldn’t run factories full of merchandise, nor would it sell and ship goods like Amazon does. Instead, in theory (none of this is settled, or even confirmed by Google), consumers would be able to buy goods in a single click directly from partner retailers that show up in Google Shopping search results. Google is reportedly also considering an expedited shipping subscription service along the lines of Amazon Prime or ShopRunner, which would store the customer’s billing info and shipping address.

Google dominates search in general. Yet when people are searching specifically for things to buy, far more start their online shopping expeditions at Amazon. Naturally, Google would love to have more consumers browsing for goods with its search tools. What’s more, it would love to keep them within the Google sphere when actually making purchases. Right now, consumers who start shopping searches at Google are typically sent to other sites—including Amazon—when the time comes to buy. Google would much rather keep a tight hold of the eyeballs and wallets of shoppers.

Amazon vs. Ebay

Amazon recently announced the introduction of a new “Make an Offer” feature that allows customers to bid and negotiate on the price of certain merchandise—options that are in the wheelhouse of eBay, which was born as an auction site and has evolved into more of a general marketplace for sellers big and small.

For now at least, Amazon is essentially just the host site for sellers who are willing to haggle with customers. Only items falling under a few sales categories, including Fine Art and Sport and Entertainment Collectibles, are available on the “Make an Offer” basis, and it’s always a third-party vendor (not Amazon) that does all the negotiating and selling. After a customer views the suggested price of an item and makes an offer, “The seller will receive the customer’s lower price offer through email, at which point the seller can accept, reject or counter the offer,” an Amazon.com press release explained. “The seller and customer can continue to negotiate through email until the negotiation is complete.”

Consumer Reports noted of Amazon’s new tool, “By adding a haggling element to its traditional fixed-price model, Amazon broadens its appeal to a wider audience of consumers motivated not simply by low prices, but by the thrill of the hunt and scoring a deal.” Note that there are no open auctions, and that all haggling takes place privately between the two parties involved—not unlike the negotiations that take place between buyer and seller in a car dealership, or perhaps via a connection made on Craigslist or Priceline. Customers can “Make an Offer” on roughly 150,000 items right now at Amazon, and the e-retail giant plans on expanding the bidding option to hundreds of thousands more items in 2015.

Apple Pay vs. All Other Forms of Payment

When Apple Pay debuted in October, the mobile payment tool—allowing customers to pay for goods with a tap of an iPhone—could be used at Macy’s, McDonald’s, Whole Foods, and several other major chains, but overall less than 3% of U.S. merchants that take credit cards were ready to accept Apple Pay. As the New York Times reported this week, however, dozens more banks, retailers, and at least one NBA Arena (Amway Center in Orlando) have since started accepting Apple Pay, and experts increasingly are of the mind that Apple has the best chances of making smartphone payments commonplace:

“Retailers and payment companies see Apple Pay as the implementation that has the best chance at mass consumer adoption, which has eluded prior attempts,” said Patrick Moorhead, president of Moor Insights & Strategy, a research firm. “They believe it will solve many of the problems they had before with electronic payments.”

Still, there’s a very long way to go before a critical mass of consumers are paying for purchases regularly with iPhones, or any smartphones. Many big-name retailers, including Best Buy, Walmart, and Gap, aren’t accepting Apple Pay because they’re trying to create their own smartphone payment system—which may or may not be easier and more convenient to use than Apple Pay. More importantly, consumers generally still see old-fashioned debit and credit cards as a more convenient and certainly a more comfortable way to pay for stuff. For smartphone payments to be a true success, Apple Pay or other services will have to convince the masses otherwise.

 

TIME Companies

eBay Reportedly Considering Massive Layoffs Ahead of PayPal Split

Ebay Reports Quarterly Earnings
A sign is posted in front of the eBay headquarters on January 22, 2014 in San Jose, California. Justin Sullivan—Getty Images

The plan could affect up to 1 in 10 employees

EBay is reportedly considering a plan to lay off as much as 10% of its workforce in anticipation of the company’s planned separation with PayPal, company insiders told the Wall Street Journal.

Unnamed sources familiar with the plan told the Journal that management has been discussing layoffs for upwards of 3,000 employees, particularly within the company’s marketplace division.

The Journal’s report comes just three months after eBay announced it would split its online marketplace from PayPal by mid-2015. Ebay first acquired PayPal, an online payment processing service, in 2002 for $1.5 billion. While it once made sense to pair an online auction house with a payments company, some investors and outsiders called for a split long before the official announcement so the two companies can better focus on their core products.

Read more at the Wall Street Journal.

TIME Toys

Find Out Which Holiday Toy Is Most Popular in Your State

eBay made a map that tracks trending toys

As the holidays approach, eBay decided to make the torture that is toy shopping slightly easier by creating an interactive map that identifies the most popular toys in every state. (Because you know kids want to stay on trend this holiday season).

While California is all about the video game Call of Duty, North Carolina kids lean more towards Frozen-themed puzzle sets. Click on your state in the interactive map below to see the most popular gifts near you:

The information was gathered based on the number of items sold on eBay per state during the week of Nov. 10.

More: The Top 10 Toys of 2014

MONEY Shopping

You May Already Be Too Late for the Hottest Holiday Toys

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If your kid wants Disney's Frozen Castle & Ice Palace Playset, let's hope you bought it already. Richard Drew—AP

Favorites from Frozen, Legos, and more are gone from store shelves or going fast. Expect to pay up if you don't want to disappoint.

If you still have Disney’s Frozen Castle and Ice Palace Playset on your holiday gift list this year, you may already be out of luck.

With Christmas approaching, the $119 toy—made by Mattel Inc—is sold out. Of course, you can find it at resellers for about $225 and even as high as $700 on eBay. There are still plenty of other Frozen-themed toys available—but only for now.

Industry analysts, poring over results from the Thanksgiving holiday week, say the hottest 25 toys have already hit their price lows and will only get more expensive as Christmas nears and the remaining inventory flies off stores’ shelves.

The silver lining? Retailers made a huge bet on toy inventory this holiday season—ordering twice as many shipments of Legos as last year, for instance, according to research firm Panjiva.

Expect fierce price competition at major retailers like Wal-Mart Stores Inc and Target Corp, which carry thousands of toys, notes Jim Silver, editor-in-chief of Time to Play Magazine.

“There will be huge promotions going on,” he predicts.

The sales will not be nationwide shopping events like Black Friday, but will pop up sporadically, culminating in major sales on Dec. 20, the Saturday before Christmas which experts expect to be an extremely heavy shopping day.

“One by one, either loudly or quietly, they will be rolling out some amazing deals,” says Panjiva CEO Josh Green.

Early Birds Get Hot Toys

Consumers love sales, but Silver notes they may be very disappointed if they can’t find the hottest toys.

Besides the sold-out Frozen Castle, there are 12 to 15 items which are currently hard to find, including the Max Tow Truck. It is listed currently around $128 on Amazon.com, depending on color—well above its list price of $59.99. Another hot item is the Imaginext Supernova Battle Rover—currently available for $109.99 at Toys R Us, slightly below the list price of $119.

There are also about 25 to 30 toys that will sell out in the next two weeks, Silver says, especially the most popular new toys in the Lego, Barbie, My Little Pony, FurReal Friend, and Nerf lines.

Toys with a movie or popular culture tie-in drive demand, while interactive pets tend to be short-lived fads (think Zhu Zhu Pets or Furby).

“There are clear bets by retailers—orders for Frozen toys and My Little Pony toys are up massively versus 2013,” says Green.

Most hot toys hit their price lows on Cyber Monday, according to data firm MarketTrack. This year, for example, the FurReal Friend Get Up & GoGo dog, which has a manufacturer’s suggested retail price of $59.99, was being offered for $49.99 at most stores in early November. It went down to $39 just before Thanksgiving and hit $27 on Amazon on Cyber Monday.

The very next day, the dog, which responds to commands from a remote-control leash, was back up to $39. The price is now fluctuating at most stores because of limited supply.

Similarly, the My Little Pony Friendship Rainbow Kingdom Playset, which lists at $39.99, was on sale for $35 at Target on Black Friday and bottomed out at $19.99 on Cyber Monday on Amazon for a half-price sale. It is now back up to $34 at Wal-Mart and Toys R Us.

What should shoppers do if they want the hottest toys?

“Grab the hot items early and then get bargain toys when you can,” Silver says. But you may have to wait until next year to employ this strategy.

 

MONEY Tech

Why Amazon Is Not A Monopoly

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Kevork Djansezian—Getty Images

Many of the criticisms directed at Amazon of late are nothing more than hyperbole.

The no-holds-barred fight between Amazon.com AMAZON.COM INC. AMZN 2.2141% and Hachette Book Group over e-book pricing took a turn for the worse recently (for Amazon, that is) after a number of prominent commentators suggested the U.S. Justice Department should sanction the e-commerce giant for alleged violations of antitrust laws.

“The company has achieved a level of dominance that merits the application of a very old label: monopoly,” wrote Franklin Foer of the New Republic earlier this month. And just this past week, Nobel Prize-winning economist Paul Krugman claimed in The New York Times that the online retailer “has too much power, and uses that power in ways that hurt America.”

But to anyone familiar with antitrust legislation — more specifically, federal appeals courts’ interpretation of the Sherman Antitrust Act — it’s clear that claims like these are nothing more than hyperbole. While Amazon is certainly a large and growing online retailer, even a liberal interpretation of its share of the domestic e-commerce market puts the figure at less than 50%, which is well below the 70% threshold courts typically require as proof of monopoly power.

amazons-share-of-domestic-e-commerce-sales_large

The gap between hyperbole and reality widens when you consider the e-commerce market’s insignificance in the context of overall retail sales. In 2013, for instance, domestic e-commerce sales added up to $263 billion, which is a fraction of the $4.5 trillion in total retail sales processed in the United States over the same period.

And even if a court found Amazon to possess monopoly power — as one could somewhat realistically claim it does in the e-book market — that’s still only half the battle, as it must also be proved that said power is being exercised to the detriment of consumers. According to the Justice Department’s antitrust guidance, “Prohibiting the mere possession of monopoly power is inconsistent with harnessing the competitive process to achieve economic growth.”

To prove Amazon is illegally exercising this hypothetical power, in turn, one would have to demonstrate that it is raising prices or curtailing supply by, among other measures, keeping competitors out of the market through predatory pricing or other prohibited means. Implicit in this is the assumption that Amazon earns monopoly profits — that is, the economic profits that accompany inflated prices. But as many investors know, Amazon has never reported meaningful earnings. In 2013, it generated a mere $274 million in net income from $74.5 billion in sales. That equates to a profit margin of only 0.37%.

ecommerce-sales-as-a-percent-of-total-retail-sales_large

Its willingness to forgo earnings even led former Slate columnist Matthew Yglesias to characterize Amazon as a “charitable institution being run by elements of the investment community for the benefit of consumers.” Amazon founder and CEO Jeff Bezos took issue with that point by arguing that his company isn’t a charity, but instead a business whose strategy is to make customers as happy as possible. Suffice it to say, among monopolies, that is unbecoming behavior.

As a final point, it’s important to appreciate that Amazon isn’t just a retailer; it’s also a marketplace for third parties to sell their wares and, in many cases, to compete against Amazon itself. A recent survey of companies that sell products online found that 84% of them use Amazon’s platform to do so. While the company doesn’t release figures about the size of this channel, one estimate pegged its total third-party sales last year at $73.5 billion. If accurate, this would mean Amazon facilities more third-party business than it records on its own behalf.

Thus, as a matter of law and common sense, there’s little evidence to back the claim that Amazon has exercised or is exercising monopoly power in a way that, as Krugman and other commentators would lead you to believe, hurts America. Does this mean the online giant won’t ultimately accumulate enough market share to do so? No. But it does mean that we have years, if not decades, before that’s a legitimate concern for the Internet retailer.

TIME Silicon Valley

In Silicon Valley, You Can Forget Aging Gracefully

HP CEO Meg Whitman Visits China
ChinaFotoPress—ChinaFotoPress via Getty Images

Getting old isn't easy, especially in tech

Nature abhors the old, Emerson said. In 2014, we can add: so do technology investors. Because in the tech sector, where innovation and growth are worshipped and rewarded with obscene valuations, the esteemed companies that helped establish Silicon Valley and shape the Internet are not being allowed to age gracefully.

HP is breaking into two, despite years of its CEO saying this wouldn’t happen. eBay’s spinning off PayPal, after its CEO insisted this made no sense. Both companies knuckled under shareholder pressure. Now Yahoo is facing pressure to cash out of Alibaba and merge with AOL. That follows Dell going private and IBM ditching its low-end servers. There are even investor rumblings that Microsoft would be better broken into pieces.

Spinoffs, breakups, LBOs and shotgun marriages aren’t uncommon among aging, troubled companies. But the wave of events hitting companies once considered blue-chip tech firms is unprecedented. Only a decade ago, most of these companies were at the top of their games. Even today, many are so profitable they annually pay out billions, if not tens of billions, to shareholders through dividends and buybacks. And while many of these companies have been undervalued by investors for years, they are now being treated as if they are entering a period of advanced decay.

In sectors like utilities or retail, slow growth is tolerated as long as a healthy profit margin is maintained. But in tech, profits aren’t enough without growth. And there is plenty of growth among the younger generation of tech giants like Google, Facebook, and LinkedIn. The gap between long-in-the-tooth tech giants and lithe, growing companies is getting wider by the year. While the latter are driven by innovation the former are pushed around by shareholder demands.

Tech investors have always been growth-oriented, but now it’s becoming an obsession. And why not? As the network effects long promised in the early years of the Internet finally kick in, growth at a successful startup can mushroom from seed round into large cap in a few years. Airbnb, Uber and WhatsApp were all founded about five years ago and today are valued at $10 billion, $18 billion and $22 billion, respectively.

Often, the new generation of successful startups push to stay out of public markets as long as possible to avoid the public scrutiny, quarterly earnings parades and exposure to shareholder activists that are plaguing the likes of HP, eBay and Yahoo. The world of secondary markets and venture investing have evolved to accommodate them, allowing institutional investors who can afford substantial stakes to become investors while the startups remain private.

Yet there’s a cautionary lesson here that startup founders should consider: The same forces that are accelerating tech growth curves are also accelerating the time to maturity. Grow big enough and companies will need to draw on public markets for financing. To meet quarterly targets, they need to maintain billion-dollar businesses even when they stop growing. That limits the ability to find new, financially risky areas of innovation. Soon enough, dividend and buyback programs are rolled out to placate antsy investors. That, as we are seeing this year, only placates them for so long.

No one is demanding a dividend from Google, or calling for Facebook to spin off Instagram. Both are delivering growth that often surpasses investor expectations and rewarded with rising stock prices. Others like Netflix and Amazon are getting a pass by investing profits into future growth. But as much as HP talks about, say, developing a mass-market 3D printer, investors only look with disappointment at the slow-growth business of PCs and IT services.

There are a few companies founded before the dot-com boom, notably Apple and Amazon, that have so far been able to buck the trend. But they may not be able to stay ahead of the curve for long. The campaign to pressure Apple for more dividends has halted because Tim Cook keeps promising new product categories like the Apple Watch. Amazon has lost nearly a quarter of its value in the last nine months amid concerns its spending is outpacing its promised growth.

For now, Apple and Amazon are anomalies among companies more than 20 years old that are promising more growth in coming years. That’s leaving their CEOs independent enough to pursue blue-sky innovations. But age catches up to all companies. And these days, companies in the tech sector are growing old faster than ever.

TIME Video Games

Is This Video Game Collection Worth $164,000?

Forget all that mad money, where the heck do you stash over 5,700 video games?

How do you value over 5,700 video games, more than 50 game systems, complete Nintendo and Sega game sets, and the ever-indefinite extension in such taglines “more”?

I have no idea. I collect rare books and I still haven’t the faintest. But someone has to try, and this Wyoming-based eBay seller’s come up with a round number for his apparently vast and immaculately groomed lot: $164,000.

$164,000 sounds like a figure arrived at carefully. Not $150,000, not $160,000, but $164,000. That has to be the result of an additive calculation, an item-by-item tabulation, not some ballpark figure plucked from the ether in multiples of ten- or fifty-thousand bucks.

More than 4,000 of the games are Nintendo-related, says seller reel.big.fish, with the majority from the 1980s and 1990s (he calls this period “the golden age” of gaming, which, just forget all the problems with such nostalgic labels, identifies the demographic the eBay sale’s targeting). The collection includes “multiple complete sets from Nintendo and Sega,” and “arguably” every retail game Nintendo put out from 1985 to 2000 (in the video below, the seller notes he’s only missing Stadium Events, though he has a reproduction cart). Other systems represented in the software mix include Atari, PlayStation, Sega, TurboGrafx and Xbox.

Want every Nintendo 64 console color variant? Custom hand-built and painted shelves (yes, shelves)? Complete-in-box Mario and Zelda sets? Eighty-one variant carts sorted by the number of screws (I had no idea this was a thing)? All 14 Virtual Boy games plus a 15th “bonus import”? Rare development carts? Dust covers for every single NES game? (I don’t, but maybe you do, and the sale currently has over 3,700 watchers, over 950 views per hour and over 50 inquiries so far.)

If you want to see the complete list, the seller’s put up a Google Doc spreadsheet with everything here (warning: it’s godawful slow to scroll, at least on a 13-inch Retina MacBook Pro). The seller says there’s no breaking this thing up, though I’d wager a gazillion people are going to ask for the privilege anyway. And note that $164,000 is just the asking price: he’s taking offers.

And if you want a tour of this fellow’s video game room–over 11 minutes of wall-to-wall game rubbernecking!–your wish is granted.

MONEY stocks

Why Companies Have to Listen to Carl Icahn

WALL STREET, Michael Douglas (standing), Saul Rubinek (head, right) 1987.
No raiders here. Today, Gordon Gekko would call himself an "activist." 20th Century Fox—Courtesy Everett Collection

Apple's noisiest shareholder is often called an "activist investor." What does that actually mean?

Updated: October 9

Investors have been pushing for—and often winning—big changes at companies. Billionaire investor Carl Icahn has fired off a letter to Apple APPLE INC. AAPL 1.0378% , of which he owns 53 million shares, urging the company to move forward on a plan to buy back its own shares. Last week, Ebay EBAY INC. EBAY 0.3325% split off its PayPal division, a plan Icahn pushed. Meanwhile, the hedge fund Starboard Value has been calling for another big tech deal: a merger of Yahoo YAHOO! INC. YHOO 0.5307% and AOL AOL INC AOL -0.2105% .

Icahn and Starboard are usually described as activist investors, a fresh bit of Wall Street jargon that may leave you scratching your head. Here’s what you need to know about this not-really-new breed of financial power players. They may be shaking up a company you invest in—or work for—next.

What is an “activist investor”?

Ownership of a company’s shares usually comes with voting rights of one vote per share. Whereas most investors simply hold a stock and seek no direct role in management decisions, activists use their voting rights—and those of other investors they can rally to their side—to push for changes in how companies are run.

Activist shareholders can include big pension funds and mutual funds. But the most prominent activists these days are hedge funds, including Bill Ackman’s Pershing Square, Starboard Value, and funds run by Icahn.

The label “activist” itself is a bit of a public relations coup. Back in the 1980s, investors like Icahn used to be better known as “corporate raiders.” Gordon Gekko, the charismatic villain in Oliver Stone’s film Wall Street, is someone who today might be described as an activist. (He was also an illegal insider trader, but that’s different from being an activist or raider.) In his iconic “greed is good” speech, Gekko is at a shareholder meeting berating “Teldar Paper” managers for their fat salaries and poor performance. He wants control of the company. If there’s a distinction between then and now—that is, between corporate raiders and activist investors—it’s that activists today seem less inclined to mount a full-fledged hostile takeover and instead use their stakes and public pronouncements to exert pressure on the existing management and boards.

“Activism” calls to mind the image of idealistic political activists, but only a tiny slice of activist investors have political or social goals, like trying to get companies to reduce their carbon footprint. Most activists just want a higher share price, and tend to cash out once the price pops up.

What do activists want companies to do?

Sometimes activist investors are interested in changing day-to-day operations. In one notorious example, Ackman pushed JC Penney J.C. PENNEY JCP -2.5797% to appoint Ron Johnson of Apple as its CEO. Johnson tried to transform Penney’s into something more Apple-like, remodeling the stores and promising always-fair prices instead of constant discount sales. Bargain-hunting customers hated it. Revenues tanked, and Ackman later admitted he made a mistake.

More recently, Starboard Value drew a lot of (amused) attention with a 294-slide presentation on Darden DARDEN RESTAURANTS INC. DRI 2.1963% , owner of the Olive Garden restaurant chain, criticizing, among other things, the generous breadstick servings and a decision not to salt the pasta-cooking water.

But activists are often focused on one-time financial restructuring moves. As David Dayen at Salon pointed out, most people missed another thing Starboard wants Darden to do: sell or spin off the real estate its restaurants sit on. That generates cash for shareholders now, or creates a new real-estate stock that might be worth more outside of Darden. It may not be so great for Darden, though, if the restaurant side of the business later hits a slump.

Some other things activist investors like companies to do: get acquired by another firm for a higher price. Buy up other companies the activist happens to also own. Take on debt, which can amp up near-term profits. Or pull cash out of the company and give it to shareholders via dividends or stock buybacks. Apple’s already been doing that, thanks in part to pressure from Icahn and the fund Greenlight Capital. Icahn’s latest letter may speed that up.

Why are activist investors getting so much attention these days?

This may be an echo effect of the 2008 crisis. Activists looking for opportunities will often look for stocks that are cheap, so they can scoop up lots of shares and (they hope) engineer a large price gain. The crash created lots of opportunities. And as companies recovered, Time‘s Rana Foroohar says, many were still nervous about the economy, so they built up big reserves of cash. That cash is a fat target for activists.

The recent rise of hedge funds has something to do with it, too. Mutual funds and pensions have to be highly diversified, so they have limited ability to build up big share blocks, and less incentive to get involved in specific fights. But in a recent paper UCLA law professors Iman Anabtawi and Lynn Stout observe that lightly regulated hedge funds, which are only available to institutions and wealthy investors, can focus their assets on just a handful of stocks.

So what’s the verdict: Are activists good guys or bad guys?

Economics blogger James Kwak puts it this way: “In finance, there are rarely battles between good and evil. Instead, you have battles of, say, greedy and corrupt versus greedy and ruthless.” CEOs in these battles want to keep their jobs and control, and shareholders want a better return for themselves.

Critics of activists say they are too focused on short-term goals. The cash a company pays out as special dividend today can’t be plowed into R&D; the debt that finances a restructuring could later drive the firm into bankruptcy. Some companies, like Google GOOGLE INC. GOOG 1.65% , have set up multiple share classes, some without voting rights, to insulate management from investor demands. The wild success of Google both as a stock and as a business shows that a company can do just fine without nagging from hedgies.

One influential study looks at what happened to 2,000 companies targeted by activists over a number of years. It concluded that activism worked out fine for investors, even over a period as long as five years. And “operating performance relative to peers improves consistently,” writes co-author Lucian Bebchuk, an economist at Harvard. This was true even for companies that took on debt or cut capital spending. But another recent study is less upbeat, finding little impact on growth and profit margins.

Even if share prices do rise, this doesn’t mean activists are good for the flesh-and-blood people who work for the corporation, or for that company’s customers, or for society or the economy as a whole, UCLA’s Stout has argued. By forcing top managers to be relentlessly focused on share price, activists make it even less likely that companies will take into account, say, their impact on the environment, or the interests of their workers. Think companies based in America shouldn’t move headquarters abroad just to save money on U.S. taxes? Talk to the hand, say the activists.

In the 1980s, the early heyday of corporate raiding, after Icahn’s takeover of TWA led to significant pay cuts and layoffs, economists Adrei Shleifer and (future Treasury secretary) Lawrence Summers described the gains from Icahn’s activism this way: “essentially a transfer of wealth from existing flight attendants… to Icahn.”

One thing a real-life Gordon Gekko probably wouldn’t have done: cut the salary of the next CEO of Teldar Paper. Although activists are supposed to be tough disciplinarians for managers, their focus on “shareholder value” helped push more companies to pay the C-suite largely in stock incentives instead of fixed salaries. CEO pay exploded.

TIME Tech

The 7 Most Important Tech CEOs You Wouldn’t Recognize

In the tech world, a few key players hog the spotlight. These eight are not household names but they are shaping the world you live in.

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