Download This PaperMargin Trading Shareholder Activists
11 Pages Posted: 8 Mar 2020 Last revised: 14 Dec 2020
Date Written: December 27, 2020
Abstract
We examine margin trading activists that we define as shareholders that are identified by Schedule 13D filings and state therein that they may use margin borrowings to finance their holdings. We find that arrivals of margin trading activists are associated with positive target announcement returns compared to those of non-margin trading activists. This indicates that margin trading activists’ arrivals are perceived as signals of positive future target firm performance. In addition, we find that margin trading activists more likely hold on their investments for a longer term.
Keywords: Margin Trading, Shareholder Activist, Hedge Fund Activism, Schedule 13D
JEL Classification: G14, G23, G32
Suggested Citation: Suggested Citation