Shareholder Activism and Impact on Corporations
The material in this chapter should be cross-referenced with Case Study 7, “McDonald’s, Wendy’s, and Hedge Funds: Hamburger Hedging? Hedge Fund Activism and Impact on Corporate Governance,” and Case Study 8, “Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives.”
Certain hedge funds focus on shareholder activism as a core investment strategy. An activist shareholder acquires a minority equity position in a public corporation and then applies pressure on management in order to increase shareholder value through changes in corporate policy. Some of the common changes advocated by activist shareholders include reducing corporate costs, repurchasing common shares, increasing corporate leverage, ...
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