The activist investor is one that has received a whole lot of press lately. We used to call them corporate raiders, but let's leave the football team from Oakland out of the discussion for now.
Activists - or investors that are looking to take an active role on the board of directors - try to unlock value that they believe is being hidden by the company.
One of the recent activists is Dan Loeb and his hedge fund Third Point, which famously took on the board of directors at Yahoo!. He was able to remove the chairmen of the board and several other directors while helping to secure a headline grabbing CEO in Marissa Mayer.
Bill Ackman is another example of an investor who helps make changes at the company he invests in. Canadian Pacific Railway is one of his bigger wins, but Herbalife (HLF - Snapshot Report) is certainly the play that Ackman will be associated with going forward.
Despite all these triumphs for the investing community, we have several failures out there as well. I know it seems like I am picking on Carl Icahn, but let's face it, he could care less what I write.
Carl has seen numerous tech related activists roles end up in failure. He went after Yahoo! long before Loeb did so and enacted change. Icahn made a play for Dell before he eventually withdrew and Dell went private. And now we have the failed bid to get Apple to increase its buyback to $145B --- settling for the idea of coming close to a $50B buyback
It should be noted that AAPL is up about $10 per share today, as Icahn has backed off, and up about 3.2% over the last three trading sessions.
Hit or Miss
Knowing this, are you more or less likely to invest in a stock that is seeing activist involvement?
Chime in below and let us know what you think!