Most activists are on your side

Article Excerpt

Activist investing has surged in the past decade, led by a relatively small but powerful group of hedge funds. They follow different activist investing strategies, but all have the same goal: wringing the greatest possible profits from the company’s assets. This can include forcing a change in the board of directors or management. Activists often call for the sale or spinoff of underperforming assets—or the company’s outright sale—to unlock investor value. Still, the company doesn’t always take the advice of the activist. Even if it does, the advice doesn’t always have the desired impact. Regardless, activist interest tends highlight the targeted company’s underlying value, and that benefits you as an investor. Indeed, since activists hold the same shares as you do, so we think that their self-interest can generally be a positive for all shareholders. shareholders. …