Activist Investing

"If you think about investing a hundred years ago though, you had Andrew Carnegie owning 20% of U.S. Steel or you had JP Morgan as a large owner of various companies over time and in the old days of investing an owner would act like an owner. So if they were unhappy with the performance of the business they would replace the CEO. If they were unhappy with the judgement of the board, they would make changes to the board." - Bill Ackman

Big Idea

An activist investor is an individual or group that purchases large numbers of a public company's shares and/or tries to obtain seats on the company's board with the goal of effecting a major change in the company.

A company can become a target for activist investors if it is mismanaged, has excessive costs, could be run more profitably as a private company or has another problem that the activist investor believes it can fix to make the company more valuable.

This generally occurs when the activist is dissatisfied with management. American billionaire investor Carl Icahn is one such example; he is known for buying large amounts of a company's stock and then pressuring the company to make significant changes to increase the stock's value.

There is certain controvery around whether Actvist Investors end up being a beneficial for all shareholders. However, I can assure you that all activist investors listed on this website make moves that result in a beneficial settlement for all shareholders.

Hall of Fame

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Lecture on Activist Investing

Visit our featured Activist Investors:

Bill Ackman

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Carl Icahn

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David Einhorn

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Jeff Smith

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