Latest news with #Schedule13G
Yahoo
a day ago
- Business
- Yahoo
Applied Digital Shares Slide After CoreWeave Sells Out
Applied Digital (NASDAQ:APLD) plunged 8.6% on Friday after a Schedule 13G filing revealed hyperscaler CoreWeave (NASDAQ:CRWV) sold its entire stake in the data-center operator, trimming its beneficial ownership to 0.0%. Warning! GuruFocus has detected 10 Warning Signs with APLD. The exit came despite Applied Digital's recent announcement of two 15-year lease agreements with CoreWeavedeals projected to generate roughly $7 billion in revenue over their lifetimesand the issuance of a warrant on May 28 allowing CoreWeave to buy up to 13,062,521 APLD shares at $7.19 each. In contrast, CoreWeave shares rose about 3% on the day, reflecting investor confidence in its standalone growth trajectory. The news underscores the complex dynamics between landlord-operators and large-scale cloud tenants: while the leases cement Applied Digital's role in the AI-driven data-center boom, CoreWeave's stake sale suggests it may be reallocating capital toward direct infrastructure spending or other partnerships. Applied Digital hasn't disclosed whether any of CoreWeave's warrant shares were exercised prior to the divestiture, leaving open questions about potential dilution or future share issuances. Why It Matters: The swift unwinding of a major tenant's equity position can rattle investor sentiment, even when long-term contracts remain intactraising debate over the balance between partnership revenue and share-price stability. This article first appeared on GuruFocus.
Yahoo
21-02-2025
- Business
- Yahoo
ETF Giants Rethink ESG Strategy Amid Tougher SEC Disclosure Rules
Vanguard and BlackRock Inc. (BLK) have hit pause on corporate engagement meetings as they consider the consequences of newly released guidance that redefines how investor activism is regulated, according to published reports from Semafor and Reuters citing unnamed sources. The Securities and Exchange Commission last week updated guidance potentially requiring more complex and expensive disclosures from fund managers who discuss issues like climate risk or board diversity with companies. The change threatens to upend the balance between passive fund management and corporate stewardship, potentially forcing ETF giants to chose between maintaining simple disclosure requirements or continuing their influential environmental, social and governance programs. The temporary pause affects routine discussions that managers of exchange-traded funds traditionally conduct with companies about governance matters and proxy votes. BlackRock and Vanguard collectively manage trillions of dollars in ETF assets, with positions in nearly every major public company. The regulatory shift could alter how asset managers engage with public companies on ESG issues, potentially limiting their ability to influence corporate policies without triggering costly disclosure requirements, as outlined in the new guidelines. The rule change may force ETF issuers to reconsider their engagement strategies. ETFs focusing on governance and sustainability metrics could face challenges, as their investment approach often relies on active company dialogue. For ETF holders, this regulatory pivot raises questions about how major fund managers will balance their ownership responsibilities against new constraints—a relationship affecting millions of investors' portfolios. The timing aligns with broader regulatory shifts under the current administration. The guidance was released while Paul Atkins, President Donald Trump's SEC chair nominee, awaits Senate confirmation. Fund managers have historically used the SEC's Schedule 13G forms—simple disclosures for passive investors—to report large holdings. The revised interpretation now suggests that even discussing climate risk or board diversity could require filing Schedule 13D forms, a more complex and costly disclosure, typically used by activist investors seeking control. The SEC previously allowed fund managers owning more than 5% of a company to engage on various issues without triggering activist reporting requirements. This created a pathway for index ETF providers, who automatically acquire large stakes through their funds, to engage without filing as activists. Vanguard and BlackRock, the world's two largest asset managers, are reviewing the guidance to determine how it affects their operations, according to the published | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
19-02-2025
- Business
- Yahoo
Exclusive-Vanguard pauses corporate meetings over new ESG guidance
By Ross Kerber (Reuters) - Top mutual fund manager Vanguard has paused meetings with portfolio companies while it reviews the impact of new guidance on investor activism from the U.S. Securities and Exchange Commission, according to people familiar with the matter. In a recent notice, the SEC, whose acting chair was appointed by President Donald Trump, revised its "beneficial ownership reporting" interpretations in ways that could put new burdens on firms like Vanguard that now rely on the SEC's Schedule 13G form to report major holdings. Going forward, the SEC said managers may need to use the more complex Schedule 13D, which would increase their costs, if they pressure management on matters like climate questions or whether a company has a staggered board or poison pill takeover defenses. Vanguard put the pause in place because it is "trying to process and understand the new guidelines so they can remain a 13G filer and not a 13D filer," said one of the sources, speaking on condition of anonymity. Ending the meetings could reduce the power of shareholder activists focused on environmental, social or governance questions, corporate attorneys say, the apparent goal of the SEC's current leadership. But it could also diminish the input that executives receive from top investors on more traditional corporate questions like executive pay. A Vanguard representative did not respond to questions on Tuesday. Rival asset manager BlackRock had also paused meetings with some of its portfolio companies. A company representative did not immediately comment on the status of these meetings on Tuesday. Sign in to access your portfolio
Reuters
19-02-2025
- Business
- Reuters
Exclusive: Vanguard pauses corporate meetings over new ESG guidance
Feb 19 (Reuters) - Top mutual fund manager Vanguard has paused meetings with portfolio companies while it reviews the impact of new guidance on investor activism from the U.S. Securities and Exchange Commission, according to people familiar with the matter. In a recent notice, the SEC, whose acting chair was appointed by President Donald Trump, revised its "beneficial ownership reporting" interpretations in ways that could put new burdens on firms like Vanguard that now rely on the SEC's Schedule 13G form to report major holdings. Going forward, the SEC said managers may need to use the more complex Schedule 13D, which would increase their costs, if they pressure management on matters like climate questions or whether a company has a staggered board or poison pill takeover defenses. Vanguard put the pause in place because it is "trying to process and understand the new guidelines so they can remain a 13G filer and not a 13D filer," said one of the sources, speaking on condition of anonymity. Ending the meetings could reduce the power of shareholder activists focused on environmental, social or governance questions, corporate attorneys say, the apparent goal of the SEC's current leadership. But it could also diminish the input that executives receive from top investors on more traditional corporate questions like executive pay. A Vanguard representative did not respond to questions on Tuesday. Rival asset manager BlackRock (BLK.N), opens new tab had also paused meetings with some of its portfolio companies. A company representative did not immediately comment on the status of these meetings on Tuesday. here.
Yahoo
19-02-2025
- Business
- Yahoo
Trump's SEC leader shifts power from investors to boardrooms
By Ross Kerber (Reuters) -New policies from the top U.S. securities regulator hand corporate boards more power over investors in ways that could curtail investor-initiated reform efforts on everything from climate policy to director contests, experts say. Since last month when U.S. President Donald Trump named Mark Uyeda acting chair of the Securities and Exchange Commission, the agency has made it easier for boards to block shareholder resolutions, put stricter filing requirements on passive funds, and limit investors' communication abilities. The changes give directors more scope to nix efforts to have companies limit emissions or report workforce diversity details, while traditional activists running their own director slates could also find it harder to challenge boards, attorneys say. "It's a relatively dramatic reallocation of power away from large shareholders back to corporate management, not just to make corporate policy but to protect themselves against activists," said Tulane University business law professor Ann Lipton. Uyeda and other Republican officials - including Paul Atkins, Trump's pick to run the SEC - have made clear their skepticism of environmental, social and governance (ESG) investment considerations. "Shareholder meetings were not intended under state corporate laws to be political battlegrounds or debating societies," Uyeda said in a 2023 speech. An SEC spokesperson declined to comment when contacted by Reuters. Atkins did not respond to questions sent via his current firm. The SEC's changes are in line with other Trump administration efforts such as dismantling diversity programs and withdrawing from the Paris Climate Agreement. ESG resolutions drew significant support in 2021 and 2022, but less so since. In a February 11 legal bulletin the SEC made it easier for companies to skip votes on the resolutions such as by claiming the proposals "micromanage" their businesses. That change could make it harder for ESG-minded activists even to start talks with corporate executives. "If it's harder to get your resolution through at the SEC, it will be harder to do that kind of work," said Rick Alexander, CEO of the Shareholder Commons, which tracks and writes resolutions. On Feb. 11, the SEC also revised "beneficial ownership reporting" interpretations to broaden the requirements on firms like asset managers BlackRock (BLK) and Vanguard (VOO), which often rely on the SEC's Schedule 13G form to report major holdings. Going forward, the agency tightened when managers can use the form rather than the more complex Schedule 13D, which would increase their costs. A new SEC test is if a company "exerts pressure on management" such as tying director votes to whether a company has a staggered board or poison pill takeover defenses. Proxy voting policies of both BlackRock (BLK) and Vanguard (VOO) suggest those circumstances could lead to critical votes. BlackRock and Vanguard declined to comment. BlackRock temporarily paused meetings with some portfolio companies as of Tuesday with an eye on the new rules. Jessica Strine, CEO of shareholder advisory firm Jasper Street Partners, said the SEC's new interpretation could have a potential downside for companies as well if they cannot know what their top investors think. "It's not a complete gift to management teams if it means they no longer have engagement opportunities with their top shareholders," she said. "That means they don't get to make their case" before votes are cast at annual meetings on matters like executive compensation. Caroline Crenshaw, currently the lone Democratic member of the SEC via e-mail said the change could chill the big funds' outreach. "The interpretation muddies the waters for institutional investors, with the unstated goal of dissuading them from engaging with corporations. At bottom, this policy is bad for capital formation,' Crenshaw said. A third change involves new guidance on when investors can use the SEC's electronic records system to distribute so-called "exempt solicitations," or communications with other shareholders. Once meant as a tool to reveal closed-door discussions among bigger institutional holders, smaller investors started filing their own exempt solicitations as a cheap way to make their arguments on issues like whether to oppose a certain director or support a shareholder resolution. In a January 27 update the SEC narrowed their permissible use. The documents are "not intended to be the means through which a person disseminates written soliciting material to security holders," the SEC said, but rather only to notify the public of written materials sent to security holders through other means. For Tom Quaadman, Senior Vice President for the U.S. Chamber of Commerce, a top business lobbying group, the SEC's changes were welcome. "You're seeing a rebalancing of SEC policies and rules that are designed to take out special interest activism and bring things back to a focus on investor return," he said. Sign in to access your portfolio
