New York (HedgeCo.net) – When it was announced on Friday that activist hedge fund ValueAct Capital Management had secured a $1 billion stake in American Express (NYSE: AXP), it was natural to expect a bounce in the stock and bounce it did. Between Friday and Monday, AXP gained 8.35% as investors jumped on board with ValueAct to give the stock its best two-day rally in recent memory.
Prior to the last two days, AXP had been struggling and shares had dropped 18.58% year to date. That decline had made the stock one of the worst performing members of the Dow in 2015. Even after the jump over the last two days, the stock is still down almost 12% on the year.
While investors have jumped on board, some speculate that ValueAct’s role will be limited and that it may take some time before the company’s fortunes turn around. Articles from both theStreet.com and 24/7 Wall Street cautioned investors about trying to ride ValueAct’s coattails.