market, CEOs began to face intense pressure to change the model to maximize company’s shareholder value. Alexandra Stevenson, No Barbarians at the Gate; Instead, a Force for Change, New York Times: DealBook, Jan. 6, 2014, at . Activist investors have become far available more aggressive since the economic downturn and an activist investor may target all companies, no matter their size. Activist Nelson Peltz and his hedge fund attempted to have PepsiCo acquire a new food company and then split the food and drink companies into separate companies. Daniel Loeb attempted to have Sony split into multiple companies to allow the losing division to not hurt the profitable divisions. Loeb believed that this move would increase share price by around 60%. Sony entertained some of idea and sold off the personal computing division Loeb’s and split its TV manufacturing division that resulted in an 11% jump in the share price. Brooke Sutherland et al., Sony Woes Seen Prelude to Loeb-Inspired Breakup: Real M&A, Bloomberg, Feb. 10, 2014, . These aggressive tactics and drastic ideas have produced very high available at returns for the hedge fund clients as well as the shareholders. Some activist investors prefer to describe their investment strategy as or “constructivist” investors because they attempting to construct a more efficient company or “suggestivist” suggest ways to build shareholder value. Nathan Vardi, The Golden Age of Activist Investing, Forbes, Aug. 6, 2013, available at Activists can serve a valuable role in bringing in new ideas to a stagnant boardroom or management suite to help develop and grow shareholder values. Activist hedge funds serve as watchdogs over corporate governance for other shareholders. The problems with dispersion of shareholders in the 1960s and 1970s manifested itself in management and boards who were not working to promote shareholders but instead working to promote themselves. During this era, no shareholder had the power or the financial resources to
market, CEOs began to face intense pressure to change the company’s model to maximize shareholder value. Alexandra Stevenson, No Barbarians at the Gate; Instead, a Force for Change, New York Times: DealBook, Jan. 6, 2014, available at . Activist investors have become far more aggressive since the economic downturn and an activist investor may target all companies, no matter their size. Activist Nelson Peltz and his hedge fund attempted to have PepsiCo acquire a new food company and then split the food and drink companies into separate companies. Daniel Loeb attempted to have Sony split into multiple companies to allow the losing division to not hurt the profitable divisions. Loeb believed that this move would increase share price by around 60%. Sony entertained some of Loeb’s idea and sold off the personal computing division and split its TV manufacturing division that resulted in an 11% jump in the share price. Brooke Sutherland et al., Sony Woes Seen Prelude to Loeb-Inspired Breakup: Real M&A, Bloomberg, Feb. 10, 2014, available at . These aggressive tactics and drastic ideas have produced very high returns for the hedge fund clients as well as the shareholders. Some activist investors prefer to describe their investment strategy as “constructivist” or “suggestivist” investors because they attempting to construct a more efficient company or suggest ways to build shareholder value. Nathan Vardi, The Golden Age of Activist Investing, Forbes, Aug. 6, 2013, available at Activists can serve a valuable role in bringing in new ideas to a stagnant boardroom or management suite to help develop and grow shareholder values. Activist hedge funds serve as watchdogs over corporate governance for other shareholders. The problems with dispersion of shareholders in the 1960s and 1970s manifested itself in management and boards who were not working to promote shareholders but instead working to promote themselves. During this era, no shareholder had the power or the financial resources to