Bottom Line Having an activist engaged in a stock you own may be a good thing or a bad thing depending upon the situation.
Share An activist shareholder is a large stakeholder who attempts to gain control of a company and replace its management.
In addition, activist firms tend to garner a fair amount of press and often have a podium to air their grievances. Because they often purchase, or have the ability to purchase, or short large quantities of stock, activist shareholders are powerful. Get a free 10 week email series that will teach you how to start investing.
For more on spin offs, see Parents And Spinoffs: This in turn can make them work harder and cause them to try to find ways Activist investor enhance stakeholder value. This could push the stock price up and, by extension, benefit common shareholders.
To be clear, management may or may not be Activist investor to such ideas. However, activist investors often have more influence for several reasons. THI donut business as a means of increasing value. Activists Look Out for Themselves Activist firms often try to convince existing shareholders and the media to understand and buy into their agenda, but at the end of the day, they may be looking out primarily for themselves and doing what is in their best interests.
This sounds like a good thing for shareholders, right? Trading Center Want to learn how to invest?
This generally occurs when the activist is dissatisfied with management. In some cases they may latch onto a position and hold it for years. However, when the activist decides it is time to unload the shares, it may logically place a significant amount of downward pressure on the share price.
As a result, management and the board may be more willing to work with an activist. Their timing can be off and they can and do lose money or become involved in situations that take an extraordinarily long time to pan out.
Delivered twice a week, straight to your inbox. Perhaps the most important things to understand is that sometimes activists have influence over companies that the average common shareholder would generally not have. When that happens, the share price may increase. On the downside, they can be extremely fickle, and sometimes when it comes down to it, they may keep their financial interests above those of all others.
There is a belief that activists may have important industry contacts and access to solid research. They may also be more willing and financially able to accept a loss on the position. Again, investors who are looking to or are considering copying an activist as some may do might be wise to keep this in mind.
They may also have a stated desire to replace the existing board.63 rows · Top activist investors list includes list of activist investors and activist hedge funds based in.
An activist shareholder is a large stakeholder who attempts to gain control of a company and replace its management. This generally occurs when the activist is dissatisfied with management. An activist shareholder is a shareholder that uses an equity stake in a corporation to put pressure on its management.
The goals of activist shareholders range from financial (increase of shareholder value through changes in corporate policy, financing structure, cost cutting, etc.) to non-financial (disinvestment from particular countries, adoption of environmentally friendly policies, etc.).
6 days ago · A proxy battle for control of the board of directors is likely to ensue. An activist investor is an individual or group that invests in a company and/or obtains seats on the board to effect a major change in the company.Download