Blockholder Heterogeneity, Multiple Blocks, and the Dance Between Blockholders

Abstract

We study blockholder presence in a large panel and document substantial heterogeneity in holding periods, position sizes, and positions taken across blockholder types. Nonfinancial blocks are more likely to be observed in smaller, riskier, younger, and less liquid firms. These patterns are either not evident, or are reversed, for financial blocks. For all but small financial blocks, we detect significant negative interdependence in blockholder investment decisions, with the presence of one blockholder crowding out others, a behavior that appears causal. Small financial blocks often coexist in the same firm, an outcome that appears to reflect correlated investment styles.

Keywords: Blockholders, blocks, shareholders

JEL Classification: G30