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December 10, 2010
Have Pfizer's Investors Had Enough?
It's taken a while, but have Pfizer's long-suffering investors finally had enough? FiercePharma has a roundup of stories that suggest that some of the institutions are upset over the abrupt departure of Jeffrey Kindler this past weekend. The quote that leaps out is one from an unnamed hedge fund manager who calls the current board "value destroyers".
Who'd disagree? But who would think that it would take this long for such people to realize the value that's been shredded over the years by Pfizer's acquire-acquire-acquire strategy? Here's ten years of Pfizer versus the S&P500. Up until 2004, with a couple of brief excursions, Pfizer stock basically tracks the index. After that, it lags badly. Over a decade of hard work on Wall Street, analyzing Pfizer's prospects, peering into their books, assessing their portfolio, weighing the chances for each drug, the ramifications of each acquisition: in vain. All in vain, because you'd have done far, far better with the money by parking it in an index fund and walking away to do something more meaningful with your time. Not that you wouldn't have lost money doing that; the S&P 500, damn it all, is down over a ten-year span. But you'd have lost a lot more if you'd listened to Pfizer's press releases or anyone who recommended that you buy their stock.
I've been complaining here about Pfizer's strategy since at least 2003, but it's not like I'm happy about being right. So many people have had their lives disrupted by Pfizer's acquisitions, and there's been so little return on all of it that it's hard to feel good about anything associated with the company's recent history.
And now that all these gigantic deals have been done, the employees have been jerked around, and the facilities closed, what are these big investors proposing to do about it? An angry committee has been formed to discuss strategic barn-door-closing initiatives, but the horses are over the horizon.
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