what is Activist Investing

**Conclusion**: Activist investors are specialized hedge funds or individual investors that acquire significant stakes in publicly traded companies with the aim of influencing or taking control of their management and strategic direction. They often seek to unlock hidden value within the company and create shareholder value by pushing for changes that they believe are in the best interests of the company's shareholders.

1. **Role and Strategies**:
- Activist investors can advise company management or force major changes such as restructuring, divestitures, or even replacing the board of directors.
- They typically target companies with structural flaws in management and aim to add value by influencing decisions or bringing in new management.
- Their strategies often involve public announcements, filings with regulatory bodies like the SEC, and sometimes proxy fights.
2. **Types and Notable Players**:
- Types include individual activist investors, who can be influential but may not always align with other shareholders' interests, and private equity firms that often take control with the intent to privatize the company.
- Notable activist investors include Carl Icahn, Nelson Peltz, Bill Ackman, and Daniel Loeb, who have been involved in high-profile campaigns.
3. **Impact on Companies**:
- Activist investors have been effective in addressing agency problems between shareholders and management, potentially creating value for all shareholders.
- Their actions can lead to strategic redirections, changes in operational decisions, and improvements in corporate governance.
- However, there is debate over the effectiveness of activist investing, as it often prioritizes the activist investor's own interests.
4. **Recent Trends and Examples**:
- Recent years have seen increased activism from mutual funds and other institutional investors, reflecting a broader trend of more widespread shareholder engagement.
- Examples include Starboard Value's activism at Salesforce, where they pushed for changes that led to significant value appreciation.

In summary, activist investors are a distinct category of investors who use their influence to drive changes in companies they believe are undervalued or managed inefficiently. While they can lead to positive changes, their actions can also be contentious and may not always align with the interests of all shareholders.