Abstract

http://ssrn.com/abstract=2139482
 
 

Citations (3)



 


 



Hedge Fund Activists: Do They Take Cues from Institutional Exit?


Nickolay Gantchev


University of North Carolina Kenan-Flagler Business School

Chotibhak Jotikasthira


University of North Carolina Kenan-Flagler Business School

August 28, 2015


Abstract:     
Institutional selling raises a firm’s probability of becoming an activist target. Institutions may signal to activists that a firm needs an intervention (signaling) or provide camouflage for the activists’ block formation (liquidity). Consistent with the latter, activist purchases closely track institutional sales at the daily frequency, and such synchronicity is stronger among targets with lower expected monitoring benefits, suggesting that trading gains supplement these benefits in the activist’s targeting decision. Furthermore, institutional selling appears to accelerate the campaign launch at firms already followed by activists, thereby determining which candidates with fundamentals conducive to activism get targeted at a particular time.

Number of Pages in PDF File: 75

Keywords: Shareholder activism, Corporate governance, Hedge funds, Institutional investors

JEL Classification: G11, G12, G23, G34


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Date posted: September 1, 2012 ; Last revised: August 29, 2015

Suggested Citation

Gantchev, Nickolay and Jotikasthira, Chotibhak, Hedge Fund Activists: Do They Take Cues from Institutional Exit? (August 28, 2015). Available at SSRN: http://ssrn.com/abstract=2139482 or http://dx.doi.org/10.2139/ssrn.2139482

Contact Information

Nickolay Gantchev (Contact Author)
University of North Carolina Kenan-Flagler Business School ( email )
Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States
919-962-4926 (Phone)
919-962-2068 (Fax)
HOME PAGE: http://sites.google.com/site/nickolaygantchev/

Chotibhak Jotikasthira
University of North Carolina Kenan-Flagler Business School ( email )
Chapel Hill, NC 27599-3490
United States

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