AKRON — A shareholder's group that said it owns 10% of Goodyear's publicly traded stock is calling on the tire maker to take steps to "reverse a period of negative performance" and hopefully restore value to the company's stock.
Elliott Investment Management L.P., a Florida-based investment firm with $55 billion in assets, sent a letter on May 11 to Goodyear CEO Richard Kramer and the company's board of directors detailing reasons for what it called the tire maker's poor stock performance while outlining steps it said the company should take to "reverse a period of negative performance," including:
- Appoint five new "highly qualified" individuals to its board to improve governance and spearhead change;
- Divest its corporate retail stores and use the proceeds to pay down its debt and improve its financial flexibility; and
- Form an operational review committee to develop an operational and development plan.
"We believe that, taken together, these steps will strengthen Goodyear's financial position, bolster its competitiveness globally and create sustainable value, potentially driving Goodyear's stock price to exceed $32 per share (approximately 179% upside from current levels). Moreover, we believe all of these steps are achievable in the near term," the company wrote.