Analyse activist investing, including its logic and the way campaigns are run
The idea
Activist investors buy meaningful minority stakes in companies they regard as undervalued because of poor strategy, weak governance or inefficient capital allocation, then press for change to release that value. Tactics escalate from private letters and meetings with management to public campaigns, shareholder resolutions, proxy contests for board seats and litigation. Typical demands are selling businesses, returning cash through buybacks or dividends, cutting costs or changing management. Targets tend to have low valuations, lagging performance and dispersed shareholders. Activism is concentrated, relatively illiquid and needs a horizon long enough for change to take effect. The trap is ignoring the costs of a campaign, the chance it fails, and that crossing disclosure thresholds reveals the stake to the market.
In the app: 1 practice questions on this outcome, a narrated walkthrough with diagrams, spaced review that brings it back before you forget it.
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