Why Activist Investors and Other Contrarians Battle for Control of Losing Companies

Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations (Wiley Finance)

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Language	:	English
File size	:	3084 KB
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Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Word Wise	:	Enabled
Print length	:	236 pages
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Activist investors and other contrarians often target losing companies, believing that they can turn them around and make a profit. This can be a risky strategy, but it can also be very rewarding.

What is an activist investor?

An activist investor is a type of investor who takes an active role in influencing the management of a company. They typically do this by acquiring a significant stake in the company and then using their voting power to push for changes.

Activist investors often target companies that they believe are undervalued or have not been managed well. They may push for changes such as selling off underperforming assets, cutting costs, or replacing management.

What is a contrarian investor?

A contrarian investor is a type of investor who goes against the grain. They typically buy stocks that are out of favor with the market, believing that they are undervalued.

Contrarian investors often target losing companies because they believe that they have the potential to turn around. They may be willing to take on more risk than other investors, believing that the potential reward is worth it.

Why do activist investors and contrarians target losing companies?

There are several reasons why activist investors and contrarians target losing companies.

• They believe that they can turn them around. Activist investors and contrarians believe that they have the expertise and experience to identify undervalued companies and turn them around. They may have a history of successful turnarounds, or they may have a plan for how they will improve the company's performance.
• They see an opportunity to make a profit. Activist investors and contrarians believe that they can make a profit by buying losing companies at a low price and then selling them at a higher price after they have turned them around.
• They want to make a difference. Some activist investors and contrarians are motivated by a desire to make a difference in the world. They may believe that they can use their influence to improve the company's performance and create value for all stakeholders.

What do activist investors and contrarians do to try and turn around losing companies?

Activist investors and contrarians use a variety of tactics to try and turn around losing companies.

• They may acquire a significant stake in the company. This gives them the voting power to push for changes.
• They may push for changes in management. They may believe that the current management team is not ng a good job and that a new team is needed to turn the company around.
• They may push for changes in the company's strategy. They may believe that the company's current strategy is not working and that a new strategy is needed.
• They may sell off underperforming assets. They may believe that the company is holding on to assets that are not profitable and that these assets should be sold off.
• They may cut costs. They may believe that the company is spending too much money and that costs need to be cut.

Can activist investors and contrarians be successful?

Activist investors and contrarians can be successful in turning around losing companies, but it is not always easy. There are many challenges that they may face, such as resistance from management, a lack of support from shareholders, and a difficult economic environment.

However, if an activist investor or contrarian is successful in turning around a losing company, the rewards can be great. They can make a lot of money, they can make a difference in the world, and they can earn the respect of their peers.

Activist investors and contrarians play an important role in the market. They can help to identify undervalued companies and turn them around, creating value for all stakeholders. However, it is important to remember that investing in losing companies is a risky strategy. It is important to do your research and understand the risks involved before investing.

Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations (Wiley Finance)

4.6 out of 5

Language	:	English
File size	:	3084 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Word Wise	:	Enabled
Print length	:	236 pages
Lending	:	Enabled

FREE