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Power Sheet – November 24, 2015

Leaders do what they believe to be right, even when it defies conventional views or demands personal sacrifice. That’s what makes it leading, not following. Defiant leadership is all around us this morning, and by definition, we don’t know how it will work out. That’s why it’s so interesting and instructive to watch.

You’re marching to a different drummer when Hillary Clinton and Donald Trump are united in loathing you. Pfizer CEO Ian Read knows the feeling. His $160-billion agreement to buy Allergan is not just the year’s biggest deal but also apparently the largest tax inversion ever, which is why Clinton, Trump, and myriad others despise it. Read’s decision to go ahead with the deal is grandmaster-level chess. The inversion is clearly legal, and the critical judgment is whether public and political backlash will be overly damaging. My guess is that Read’s maverick bet may well prove right.

Bill Ackman is the most visible of several hedge fund managers who got burned badly by loading up on shares of Valeant Pharmaceuticals International, down 67% since early August. The world doesn’t like Valeant’s relationship (since ended) with a pharmacy that sold its products and now looks askance at Valeant’s accounting. Ackman sees an opportunity to buy the stock cheap; he just revealed that he has bought millions more shares.

Marissa Mayer’s effort to save Yahoo, examined here last Friday, has been a struggle since she arrived from Google over three years ago, but at first investors were mostly optimistic. Now they’re mostly not, and the WSJ reports that “dozens of executives who had been instrumental to Ms. Mayer’s turnaround plan have left for jobs elsewhere.” She pushes ahead, seemingly undeterred by the growing skepticism and confident she’s on the right track.

For years Barry Diller’s leadership of IAC/InterActive Corp. looked troubled or maybe just wrongheaded. He kept buying online businesses – it now owns dozens, such as About.com, Vimeo, Dictionary.com, Investopedia, and The Princeton Review – but the whole always seemed worth less than the sum of the parts. So he started spinning them off in 2008, but for a while many of them underperformed on their own. Now, as Andrew Ross Sorkin reports in the New York Times, Diller is looking like a genius. Since he started the company 20 years ago, it has been a much, much better investment than Disney, Microsoft, or the Nasdaq. Yet Diller insists there was no grand strategy. The company’s progress was, he says, just “one foot in front of the other.” He stuck with it when it didn’t seem to be working. Eventually it worked.

That’s the challenge of defiant leadership, or what we might call real leadership. You can’t know if it will work or when it might. Maybe you’ll be a hero, or maybe you’ll be proven right long after you’re gone, or maybe it will never pay off at all. You must appear confident when you’re not.

Let’s keep an eye on the progress of these four defiant leaders, remembering how much each one has on the line.

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What We’re Reading Today

Turkey downs Russian warplane

The incident occurred near the Syrian border, and Turkey, a NATO member, says the craft violated its airspace. It’s a strain on relations between the West and Russia as the two sides try to form a coalition to fight ISIS. French President Francois Hollande will be in the U.S. today to speak with President Barack Obama about uniting around the cause before meeting with Russian President Vladimir Putin later this week. Washington Post

Investors question the Pfizer-Allergan deal

Pfizer CEO Ian Read closed the deal to purchase Ireland-based Allergan at about $355 a share, but the stock was recently trading about 17% below that. Investors may be skeptical that the deal will get done in light of political anger over inversions – merging with a company outside the U.S. and moving headquarters overseas to avoid taxes. But it would take an act of Congress to stop it. Fortune

VW investigation to take months

CEO Matthias Müller said the company is still not close to finding the culprits in the diesel engine emissions cheating, which affects over 11 million vehicles worldwide. Müller added that fixing vehicles in Europe, where most of the affected cars were sold, will not cost as much as first thought. German prosecutors began investigating five VW employees for tax evasion related to a separate CO2 emissions cheating scandal. NYT

Marissa Mayer battles a morale crisis

Yahoo executives have begun to abandon ship as they fail to see any clear direction while accusing Mayer of misleading advertisers. Her strategies have shifted often, confusing her team, some of them say, without producing results. Mayer has always said that fixing Yahoo would take years, but many within her team have had enough. WSJ

Building a Better Leader

One in five employees celebrate Thanksgiving with coworkers

The South in particular welcomes work friends to the table. WKBW

With more companies adopting sales technology…

…make yourself indispensable by getting better at the things a website or robot can’t do. Fortune

Why do we get sick around the holidays?

Many factors seem to be at play, but it’s probably not because you’re working yourself ragged. Quartz

Refugees and Terrorism

Chris Christie’s campaign shows signs of life

Combining issues raised by the Paris attacks and his own experiences in the aftermath of 9/11, New Jersey Governor Christie has revived a campaign that was looking doomed. He has spent much time in New Hampshire, where two polls show he’s now viewed favorably for the first time. NYT

Hillary Clinton blasts GOP candidates’ responses to Paris

Calling out Republican candidates directly, including Donald Trump, Hillary Clinton chided them for seeking political gain from the Paris attacks. The war is against “thugs,” she said, not Muslims, adding that she supports America leading efforts against ISIS but does not believe the U.S. should commit ground troops. CNN

GOP Governor sued over Syrian response

The American Civil Liberties Union of Indiana has sued Governor Mike Pence for trying to block Syrian refugees from entering the state. Pence has said he is moved by Syrian refugees’ plight but would not allow the migrants to enter his state until the Federal government implements security safeguards. USA Today

Up or Out

Elliott Management has appointed Jonathan Pollock its co-CEO. Pollock will work alongside founder Paul Singer. NYT

DreamHost CEO Simon Anderson will step down. Fortune

Fortune Reads and Videos

Carl Icahn grabs a 7.13% stake in Xerox

He’s now the company’s second largest shareholder. Fortune

The Tesla Model X has a price tag…

…of $80,000, or $5,000 more than cheapest Model S version. Fortune

Jack Ma in talks to purchase the South China Morning Post

It’s still unclear if it’s Alibaba or Ma personally who would purchase SCMP Group, which publishes the newspaper.  Fortune

Ford drops Takata airbags

It joins other manufactures that dumped the company following 23 million recalls in the U.S. after revelations that faulty airbags had led to eight deaths. Fortune

On this day…

….in 1998, AOL announced it would buy Netscape for $4.2 billion. But the pioneering web browser was past its peak, and in 2012 AOL sold some of Netscape’s patents to Microsoft for $1 billion.  CNNMoney

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Produced by Ryan Derousseau
@ryanderous
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