Shining a Light in a Dark Corner: EDGAR Search Activity Reveals the Strategically Leaked Plans of Activist Investors

60 Pages Posted: 1 Jun 2020 Last revised: 26 Mar 2021

See all articles by Ryan Flugum

Ryan Flugum

University of Northern Iowa

Choonsik Lee

University of Rhode Island

Matthew E. Souther

University of South Carolina - Darla Moore School of Business

Date Written: May 28, 2020

Abstract

We provide evidence of a network of information flow between activists and other investors prior to 13D filings. We match EDGAR search activity to investor IP addresses, identifying specific investors who persistently download information on an individual activist’s campaign targets in the days prior to that activist’s 13D disclosures. This apparent leaking of activist campaign plans seems to benefit both parties: the informed investor, unnamed in the 13D, increases its holdings in the targeted stock prior to the price surge upon 13D disclosure, while the activist earns voting support that increases their likelihood of pursuing and winning a proxy fight.

Keywords: Activist campaigns, Investor coordination, Investor search activity, Proxy fights

JEL Classification: G14, G30, G34, G38

Suggested Citation

Flugum, Ryan and Lee, Choonsik and Souther, Matthew, Shining a Light in a Dark Corner: EDGAR Search Activity Reveals the Strategically Leaked Plans of Activist Investors (May 28, 2020). Available at SSRN: https://ssrn.com/abstract=3612507 or http://dx.doi.org/10.2139/ssrn.3612507

Ryan Flugum

University of Northern Iowa ( email )

Cedar Falls, IA 50614
United States
3192732976 (Phone)

Choonsik Lee (Contact Author)

University of Rhode Island ( email )

Ballentine Hall
7 Lippitt Road
Kingston, RI 02881
United States

HOME PAGE: http://sites.google.com/site/choonsiklee79/

Matthew Souther

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States

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