Tactics of Activist Investors
This morning’s Wall Street Journal features an article (“Don’t Make Me Do This: Rise of the Reluctant Activist”, February 19, 2016) on how many investors are adopting, even if reluctantly, the tactic of activist investors. Referring to a technology-oriented hedge fund manager:
Investor Jeffrey Osher sat on his holdings in prepaid-debit-card issuer Green Dot Corp. for three years before he lost his patience.
In December, after a string of disappointing earnings reports that left the company’s shares down sharply, the hedge-fund manager met with the board and asked directors to fire founder and Chief Executive Steven Streit, according to people familiar with the meeting. When the board refused, Mr. Osher’s Harvest Capital Strategies LLC did something it had never done before: It publicly threatened to run a campaign to oust the company’s directors.
Those moves put Mr. Osher into a newly emerging class of shareholders: Typically passive investors who are adopting, sometimes reluctantly, the tactics of activists (emphasis added).
This phenomenon was discussed at length in the Roundtable on Activist Investing published in the JACF’s Summer 2015 issue. Participants including professors from Harvard Law and Business Schools, senior decision-makers from leading hedge funds, and corporate managers with experience dealing with activist investors.
To read more and to download the issue Click here.