The Profits vs Protests: Corporate Value Dynamics Amidst Activist Uproar

Abstract

We examine the impact of student protests on the firms targeted for divestment during the 2023-2024 Israel-Hamas conflict. Utilizing event study methodology, we analyze cumulative abnormal returns (CARs) across key conflict periods. We find positive CARs for targeted firms at the onset of the conflict, but significant negative CARs as student protests escalated. This provides evidence of the tangible impacts of public pressure campaigns on market valuations in the short-run. However, we observe positive CARs after student protests subsided which suggests potential limitations to the sustained impact of activism and shows the market's capacity to normalize extraordinary events over time.

Keywords: Divestment, Market adaptation, Geopolitical conflict, Activism