Activist Shareholder

An activist shareholder is an investor, often a large institutional investor or hedge fund, who uses their equity stake in a publicly traded company to push for changes within the company. These changes can include altering the company’s strategy, management, financial structure, or operations. Activist shareholders seek to influence the company to improve its performance, increase shareholder value, or address governance issues. Activist shareholders may engage in various tactics to achieve their goals, such as proposing new board members, lobbying for the sale of assets, or advocating for mergers and acquisitions.

Example

An activist shareholder might pressure a company to cut costs or sell off underperforming divisions to improve profitability and increase stock price.