Activist Investor

Activist Investor

A minority shareholder who seeks to influence decision making at a company by voicing concerns, engaging in a dialogue with management, or lobbying other shareholders for support. The demands could relate to changes in management, representation on the board, acquisitions or divestitures, salaries, bonus payments, use of retained earnings etc.

Activist Investor

A shareholder or group of shareholders in a publicly-traded company that tries to make changes in management and/or operations in a way that suits the shareholder(s)' interests. Activist investors deliberately acquire substantial stakes in certain companies and therefore wield enough influence that the company often must listen to them. Activist investors may choose to negotiate directly with the company or indirectly though methods like proxy wars or public shaming. Activist investors may be motivated by ethical concerns; they may want the company to pay its workers better, for example. More often, they wish to change the company in a way that will maximize their own return. Activist investors may be investment companies, institutional investors, shareholder groups, or even wealthy individual shareholders.

Activist investor.

An activist investor attempts to force a corporation to make changes in management, board structure, investment policies, use of retained earnings, or other practices, often by introducing shareholder proposals or putting forward alternative directors.

Activist investors may be hedge funds, institutional investors, such as money managers or pension funds, wealthy individual investors, or groups of investors with a common cause.

Some activists deliberately accumulate substantial stakes in undervalued companies to force changes that will increase the share price so they can sell at a profit. Others, such as long-time or majority stakeholders, may object to current management practices, prefer an independent board of directors, or want a voice in executive pay. While they seek improvement to the bottom line, they may also be committed to strengthening the company in other ways.

Activist methods vary as well. Some wage public relations and proxy wars while others seek to implement their proposals through negotiation. In recent years activists have achieved a number of goals including increased respect for their power to effect change.

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References in periodicals archive ?
12, and a poor performance could result in an activist investor taking interest in the name, according to Bernstein.
Burford faced a storm last month as Muddy Waters sang I Don't Want to Make Love to You - to paraphrase the activist investor's blues-singing namesake.
The analyst says he's never come across a company that is a leader in a $40B total addressable market and "continues to mis-execute so badly." Box is "potentially an activist investor's dream," but five of the nine board members being founders or venture capitalizes presents a a "bit of a roadblock," says Bennett.
Transport giant FirstGroup has said it will sell off its US Greyhound coach business and spin off its UK bus arm amid pressure from an activist investor to break up the firm.
Activist investor group says Bed Bath deceptive, disingenuous
Barclays Plc (LSE: BARC) shareholders are to decide on Thursday whether activist investor Edward Bramson should get a seat on the bank's board.
The update came amid a battle to fend off pressure from New Yorkbased activist investor Edward Bramson, who is leading an aggressive campaign to muscle his way on to the bank's board.
Best of all, you can be sure that no activist investor will ever knock on our door and threaten us with changing our business model.
The activist investor responded Monday, touting his successes in previous merger deals, including Kerr-McGee's sale to Anadarko Petroleum.<br />The war of words likely won't change any investors' minds at this point, said energy finance professor Debbie Fleming at Oklahoma City University.
Fran Unsworth Costa Coffee split WHITBREAD has bowed to pressure from an activist investor and announced it will spin off Costa Coffee into a separately-listed business.
Cliff coverage 'fair' Costa Coffee split WHITBREAD has bowed to pressure from an activist investor and announced it will spin off Costa Coffee into a separately-listed business.
MILAN, Ramadan 05, 1438, May 31, 2017, SPA -- European shares opened flat on Wednesday, weighed by a fall in mining stocks and lifted by a big rise for Ericsson after an activist investor bought a stake in the telecoms equipment firm, Reuters reported..