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Do Stockholders Really Know What’s Best?

Publication Date: 
November 17, 2009
The New York Times
Andrew Ross Sorkin

Professor Joseph Grundfest, an expert in business and corporate law, is quoted in the New York Times DealBook on short term interests of stockholders versus long term interests of a company in relation to the Kraft-Cadbury deal:

When news of Kraft’s hostile bid for Cadbury broke in England a couple of months back, it caused intense debate, including whether an American company should, by all rights, really be the new home of a well-known British brand that dates back to 1824.

Felicity Loudon, the granddaughter of the former Cadbury Brothers managing director Egbert Cadbury, was quoted in The Sunday Telegraph saying that she was “particularly saddened by the possibility of one of the last remaining British icons disappearing into an American plastic cheese company.”


People involved in the deal estimate that about a third of the shares have already changed hands, moving from long-term shareholders to hedge funds. Those funds, said Joseph Grundfest, a professor at Stanford Law School, “have a long-term time horizon of about 12 minutes.”