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Emma is an equity portfolio manager hired by ASH, and she is keen on using activist strategy to the target company in order to boost shareholder value. The following table provides information on three stocks that Emma could potentially add to her portfolio.
Based on the table above, Which company's stock is most suitable to added in her portfolio?
The effectiveness of shareholder activism depends on the response of the existing management team and the tools at that team’s disposal. In many countries, defense mechanisms can be employed by management or a dominant shareholder to hinder activist intervention. These techniques include multi-class share structures whereby a company founder’s shares are typically entitled to multiple votes per share; “poison pill” plans allowing the issuance of shares at a deep discount, which causes significant economic and voting dilution; staggered board provisions whereby a portion of the board members are not elected at annual shareholders meetings and hence cannot all be replaced simultaneously; and charter and bylaw provisions and amendments.
Equity + Reading 24 Active Equity Investing: Strategies + Activist Strategies And Other Strategies
