CA Property Rights Association Cautions: More Reforms Needed to Prevent Activist-Led Hostile Takeovers
- CA Property Rigjts
- Oct 10
- 2 min read
Ouster of entrepreneur Joe Kiani at Masimo is just one example of what is broken within the system, one year down the line
The road to success is dotted with cautionary tales.
The California Property Rights Association is shining the light on much-needed reforms in corporate America today, particularly to avoid shocking activist-led corporate raids.
Last year, activist board members took over a company called Masimo and showed founder and CEO Joe Kiani the door after stealing his company — the kind of thing one usually only sees in Hollywood movies.
Kiani created the company, innovated life-saving and life-enchanting endeavors with the company, and even had the vision to grow the company bigger — that is, until his mission was at odds with Wall Street elites.
Usually, a company excels after such a takeover. That hasn’t happened at Masimo without Kiani at the helm.
The Orange County Business Journal reported that the company laid off 75 employees in its Irvine, California office and numerous employees in other locations in an effort to cut costs. MedTech Dive reported similar “cost reductions” and “discontinued” product lines. Yahoo! Finance reported that “amid leadership transitions,” the company was seeking “cost reductions.” Even worse, new management slashed jobs just before the holidays last year — which some saw as a betrayal of the very people who helped build the company.
According to other news publications including The Orange County Business Journal, in the year since Kiani departed, the company has deviated from its original mission of life-saving technologies for consumers including cuts in funding to divisions that produce consumer wearable health monitors. The company also killed “feasibility studies on non-invasive monitoring of cancer, bilirubin and diabetes.”
All of this transpired as Kiani fought his own ouster and as Masimo continued lawfare against him on his separation agreement. His opponents continue to press for the case to be heard in the Chancery Court in Delaware, widely known as a court that is reportedly unfriendly to individual entrepreneurs. The court was recently criticized by Bloomberg News and Newsmax alike, on both ends of the political spectrum, for its activist activity that now makes it appear as hostile to founders and inventors. Without a fair court system and attorneys who seek to go “court shopping,” entrepreneurs like Kiani have little respite from corporate raiders and activist takeovers.
“Reforms will help provide relief to inventors in the future,” said Ray Maldonado, Executive Director of California Property Rights Association. “Those reforms include: Transparency requiring investor disclosure; protections against insiders who are trading on information during critical board votes; and possibly stronger penalties and enforcement scaled to fit the size and scope of the ethics violations or crimes.”
Still, Masimo’s activist hostile takeover remains a dire warning for other entrepreneurs and inventors that activists associated with big corporations can come and steal your American company in a heartbeat, unless reforms are soon made.
Read more:
Orange County Business Journal:
MedTech Dive:
Yahoo! Finance:
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