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How much disruption can shareholder activists cause?

Steven Balet | February 13, 2018

After a robust 2017, shareholder activism shows little sign of abating this year. That trend has spurred a growing number of boards of directors to move to prevent their companies from becoming targets and avoid the disruption of a public activism engagement.

Not surprisingly, this has led many board members to ask: How much disruption can a shareholder activist cause?

The answer: a lot.

Who is ripe for disruption?

There is no defined trigger for shareholder activism today. While activists most often target underperforming companies, they are increasingly setting their sights on healthy companies as well. Most activity takes place at companies with market capitalizations of under $2 billion, but well-known companies with capitalization as high as $225 billion are also being targeted.

Even the goal of activists is evolving. In some cases, activists are urging public companies to drop transactions, which is a shift from the more...

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