David Tepper sends scathing letter to Whirlpool

David Tepper, billionaire founder of hedge fund Appaloosa Management, sent a strongly worded letter to Whirlpool‘s board, accusing the appliance maker of destroying shareholder value and calling for sweeping changes to its strategy and leadership.

Tepper said in the letter obtained by CNBC’s Andrew Ross Sorkin that he watched “with astonishment” as the company issued equity in what he called a large and unnecessary dilution of shareholders. He argued the capital raise came at a cost exceeding 10%, far higher than the company’s tax-adjusted debt cost of below 5% in public markets, despite management’s stated goal of reducing leverage.

“Enough is enough. There can be no more excuses,” Tepper’s letter said.

Whirlpool was the eighth-biggest holding in Appaloosa Management’s portfolio at the end of the fourth quarter, worth $282 million, according to Verity data.

Shares of Whirlpool rose nearly 1% after the news.

The hedge fund manager also faulted Whirlpool for failing to capitalize on tariffs instituted under the Trump administration, saying the company should explore partnerships or potential mergers with disadvantaged foreign competitors to strengthen its strategic position. Tepper urged directors to uphold their fiduciary duties and not allow management to act purely in its own self interest.

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