Business Commons^™

The Threat Of Activist Intervention: A Determinant Of 8-K Disclosure For Industrial Companies, Audrey Guilloteau

CMC Senior Theses

In the face of an activist threat, management may be inclined to provide additional disclosure to discourage potential intervention. This paper constructs an empirical model to measure the threat of activism and voluntary disclosure using a data set of 92 industrials focused activist events from 2008 to 2019. Propensity score matching is used to identify close peer firms that experience a threat of activism at the time a campaign is announced. Results from a difference in differences analysis indicate that firms targeted by hedge fund activists provide additional disclosure in the two-year period following the campaign announcement, as seen through …

Essays In Corporate Finance And Machine Learning, Manish Jha

Arts & Sciences Electronic Theses and Dissertations

My dissertation focuses on two broad questions. First, why do shareholder’s preferences vary, and how various agents persuade them? And second, how public perceptions about the financial sector and regulations affect economic outcomes? While my research plan contributes to the two distinct fields of literature, a unifying theme of my research is the use of innovative machine learning techniques to overcome the empirical challenges that would typically prevent measuring these sentiments objectively.

In my Chapter 1, I use a supervised machine learning model on mutual fund family’s proxy voting choices to estimate their preferences. I find that hedge fund activists …

Activist Investors: A Corporate Social Responsibility Perspective On Hedge Fund Activism And The Need For Focus On All Stakeholders, Lucy Marie Ankenbauer

Honors Theses

Corporate social responsibility (CSR) can result in distinctly different visions when instituted under the enlightened stakeholder theory or the shareholder maximization theory. The critical variation between these two theories is the principal party that businesses consider when instituting strategic decisions. Firms following the enlightened stakeholder theory will base decisions on all the various stakeholders of the company and develop policies which increase long-term firm value. Companies pursuing shareholder value maximization will consider all strategies through the eyes of the stockholders and how these individuals will be affected. Neither theory is more valid than the other, since many factors must be …

Failed Anti-Activist Legislation: The Curious Case Of The Brokaw Act, Alon Brav, J.B. Heaton, Jonathan Zandberg

The Journal of Business, Entrepreneurship & the Law

The Brokaw Act was proposed legislation aimed at “financial abuses being carried out by activist hedge funds who promote short-term gains at the expense of long-term growth . . . .” Sponsoring Senators named it after a small town in Wisconsin that, according to the Act’s sponsors, was decimated by the actions of a hedge fund activist in shutting down the local paper mill with a loss of hundreds of jobs. The Brokaw Act represented the first attempt at federal legislation aimed at restricting hedge fund activism. Since then, new and similar bipartisan proposals have appeared as have threats of …

Takeover Defenses In The Era Of Shareholder Activism, Sa-Pyung Sean Shin

Research Collection School Of Accountancy

This paper examines the interplay between takeover defenses and shareholder activism. Using a comprehensive sample of shareholder activism events between 2006 and 2014, I find a differential impact of takeover defense measures on the likelihood of being targeted for activism; a dual-class structure or a staggered board deters activism, whereas firms with a poison pill in place are more likely to become targets. Activists are more likely to demand removal of takeover defense measures and/or sale of the target firm if the firm has a staggered board or a poison pill in place, suggesting that when takeover defenses block the …