SAN DIEGO (TheStreet) -- Much earlier today I tweeted out: "New wave of greenmail?:Take-Two buys back Icahn's shares. This is becoming a trend w/activists. Should same deal be given all investors?"
Now, in 140 characters or more: Today it was Take-Two (TTWO) buying back shares from Carl Icahn. Yesterday it was ADT (ADT) buying back shares from Corvex Capital. Earlier it was Yahoo! (YHOO) buying back Third Point's stake.
And in each case, the activist investors, who had rattled the cage for change, were on the board -- making them insiders.
Is this a new-age form of greenmail? Greenmail, for those of you not around in the fun old junk-bond days of the 1980s, was when companies would pay corporate raiders (like Icahn at the time) to go away. Typically the raiders would take big stakes in companies with the threat of taking them over.
This, of course, isn't quite the same, but it clearly rubs some investors the wrong way. Among them, longtime hedge-fund manager John Levin of Levin Capital Strategies, who told me: "While there is nothing wrong apparently with an activist going on board and selling stock back to the company - and apparently nothing wrong with the company buying it - I don't feel it's good public policy and fee the public should have a chance to participate in these transactions."
He has a point:
Why should activists who become board members get special treatment? Yes, they may have stirred the pot to get the price higher, but aren't they privy to material insider info? And if so - how do we know that material insider info isn't why they're selling? As a result, shouldn't all investors get the same deal?