Is Your Company at Risk for an Activist Attack?
The numbers are sobering: nine of the Fortune-100 and 38 of the Fortune-500 companies dealt with an activist campaign in 2015. And of the latter group, four were targeted more than once. But hedge fund activism is not confined to only the largest public companies — all businesses, along with every industry and part of the world have become fair game.
Activists’ reach is growing wider, they’re getting bolder, and they are wielding even greater war chests. With $173 billion in assets under their management (AUM), hedge fund activists are constantly looking for opportunities to profit from your blind spots.
Activists go after companies with vulnerabilities, and most companies have some. These could be related to financial performance, such as missing quarterly numbers, a stagnant stock price, or comparatively weak revenue growth. Or activists might target the board due to corporate governance issues.
But vulnerabilities may be in the eyes of the beholder. If companies want to get ahead of an activist threat, they’ll want to understand their potential vulnerabilities, including how an outside hedge fund activist might see things.