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Companies Brace for New Wave of Activist Investing in 2024

  • Activist investors target underperforming companies with an eye toward implementing agendas to maximize shareholder value
  • Efforts by the SEC to limit activist interventions include proposals to shorten Schedule 13 filing deadlines, mandate amendments within a day of significant changes, and prevent shareholders from interfering with a company’s pro-ESG initiatives
  • Activist investors tackle ongoing challenges by staying on top of emerging trends, adopting best practices, and forming strategic alliances
  • DealFlow Events presents an unparalleled networking and learning opportunity: The Activist Investor Conference on March 21, 2024, in New York City
  • Like all DealFlow events, this conference promises to deliver. The event features 20+ experts discussing topics covering value investing strategies, legal issues, corporate relations, and international opportunities

Activist investors remain a force to be reckoned with. They target companies perceived to be underperforming or inefficient and implement strategies to maximize shareholder value.

That’s why they’re also called value investors.

Indicators of underperformance that grab their attention include stagnant stock prices, low profitability, inefficient resource utilization, governance deficiencies, regulatory scrutiny, and operation in industries undergoing significant disruption.

A recent example is Disney, where activist investors are leveraging their influence to alter the company’s strategic direction and corporate governance. To boost content production for its Disney+ streaming service, shareholders pressured the company to redirect resources from its annual dividend toward streaming content. Value investors also advocated for changes in the Disney board composition and executive compensation structures.

Markets typically respond positively to activist involvement. A recent example is the acquisition of a stake in Salesforce by San Francisco-based ValueAct Capital Management. ValueAct’s involvement resulted in a 10% employee reduction at Salesforce and the appointment of its co-chief executive officer to the board. Salesforce shares turned around as a result of these interventions, surging by 57% during Q1-2023.

Value investing is also picking up speed in Europe. According to a recent survey of corporate executives and activist investors, activity surged last year with a notable increase in new players launching a record number of new public campaigns.

Attempts by the SEC to curb activist interventions include proposals to decrease initial Schedule 13 filing deadlines to five days and requiring amendments within a day of significant changes. The proposals also aimed to push filers to disclose derivative holdings and eliminate the requirement for investors to act in concert. Additional rules were suggested to prevent activist shareholders from obstructing a company’s pro-ESG initiatives.

Activist investors effectively tackle these challenges by staying on top of emerging trends, adopting best practices, and forming strategic alliances.

The Activist Investor Conference on March 21, 2024 in New York City is where investors, corporate governance experts, advisory firms, proxy solicitors, and board members will gather to gain insights and forge partnerships. This year’s event features 20+ experts presenting topics covering value investing strategies, legal issues, corporate relations, international opportunities and more.

As with all DealFlow Events, the Activist Investor Conference promises to deliver. Learn more and register.

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