Important Questions About Activist Hedge Funds
By Marty Lipton, Partner, Wachtell, Lipton, Rosen & Katz
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Note from the Blog Editors: Last week on this blog we posted an article that favorably viewed the role of activists in the governance of public companies. This week we are posting an article questioning the value of activist involvement in the governance of public companies and will be considering these issues at our next Task Force on Corporate/Investor Engagement public forum on April 3. For more information and details on how to participate, please see the Public Forum website. |
In what can only be considered a form of extortion, activist hedge funds are preying on American corporations to create short-term increases in the market price of their stock at the expense of long-term value. Prominent academics are serving the narrow interests of activist hedge funds by arguing that the activists perform an important service by uncovering “under-valued” or “under-managed” corporations and marshaling the voting power of institutional investors to force sale, liquidation or restructuring transactions to gain a pop in the price of their stock. Read the rest of this entry »