Activist Investor

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Definition of 'Activist Investor'

An activist investor is an individual or group of investors who buy a significant stake in a company with the intention of influencing its management and operations. Activist investors typically have a specific agenda in mind, such as improving the company's performance, increasing its share price, or changing its corporate governance practices.

Activist investors can use a variety of tactics to influence a company's management, including:

* Submitting shareholder proposals
* Filing lawsuits
* Contacting the company's board of directors
* Speaking to the media
* Threatening to sell their shares

Activist investors can have a significant impact on a company's operations. For example, they can force the company to make changes to its business strategy, sell off assets, or replace its management team. In some cases, activist investors can even force a company to go private.

Activist investing is a controversial practice. Some people believe that activist investors are a positive force for corporate governance, as they can help to hold companies accountable and ensure that they are acting in the best interests of shareholders. Others believe that activist investors are too disruptive and that they can damage a company's long-term prospects.

The impact of activist investors on the financial markets is still being debated. However, there is no doubt that activist investors are a force to be reckoned with. They are increasingly playing a role in shaping the corporate landscape, and their influence is likely to continue to grow in the years to come.

In addition to the tactics listed above, activist investors may also use the following strategies to influence a company's management:

* Forming a coalition with other shareholders
* Buying up shares in the company's debt
* Using social media to pressure the company
* Filing complaints with regulatory agencies

Activist investors can be a powerful force for change in the corporate world. However, their tactics can also be controversial, and they can sometimes have a negative impact on a company's performance. It is important to weigh the potential benefits and risks of activist investing before deciding whether to invest in a company that is being targeted by an activist investor.

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