How to Deal with Activist Investors
Investor activism continues to rise from its dip during the pandemic, according to a recent S&P Global Market Intelligence report. Activist investors pose a serious risk - even if their concerns are valid, they still frequently end up destroying a company’s value. To deal with these investors, follow these three tips:
Understand Your Risk Level: While no company is immune from activist investors, those in a bad cycle with poor stock performance are certainly at a higher risk. Understanding where you stand in an investor's mind can go a long way towards preempting activist calls.
Recognize the Signs: Shareholder analysis done by IR teams scan for potential activist activities by auditing who holds what portions of stock. These scans will inform the company if any known activist funds are involved.
Create a Game Plan Before Activists Take Action: Often, companies are aware of activist investors but don’t bother making plans to combat them until it’s too late. After your shareholder analysis, work to create a plan to ensure your company is prepared to do what’s best for the company.
We can help build a supportive investor base - reach out to Graham Farrell (Graham.Farrell@Harbor-Access.com) [in Canada] or Jonathan Paterson (Jonathan.Paterson@Harbor-Access.com) [in the US] to start a conversation.
