Barbara A. Bliss et al., Negative Activism, 97 Washington University Law Review (forthcoming)

  • Barbara A. Bliss et al., Negative Activism, 97 Washington University Law Review (forthcoming)

Shareholder activism has become one of the most important and widely studied topics in law and finance. To date, popular and academic accounts have focused on what we call “positive activism,” where activists seek to profit from positive changes in the share prices of targeted firms. In this Article, we undertake the first comprehensive study of positive activism’s mirror image, which we term “negative activism.” Whereas positive activists focus on increasing share prices, negative activists take short positions to profit from decreasing share prices.

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Yakov Amihud, Markus M. Schmid & Steven Davidoff Solomon, Do Staggered Boards Affect Firm Value?, — Iowa Law Review — (forthcoming 2017)

We attempt to resolve conflicting empirical results in studies on the wealth effects of staggered boards by addressing issues of endogeneity, omitted variable bias and functional form. In a sample of up to 2,961 firms from 1990 to 2013 we find that additional variables provide significant explanatory power for the (negative) wealth effects of staggered firms found in prior studies, and their inclusion makes the effect of a staggered board on firm value insignificant. When we control for endogeneity by the instrumental variable method, we find again that the staggered board has no significant effect on firm value. Our results suggest caution about legal solutions which advocate wholesale adoption or repeal of the staggered board and instead evidence an individualized firm approach, and provide some measure of skepticism for law-related corporate governance proposals generally.

Influencing Control: Jawboning in Risk Arbitrage

In an “activist risk arbitrage,” a shareholder attempts to change the course of an announced M&A deal through public campaigns, and profits from improved terms. Compared to conventional (passive) risk arbitrageurs, activists target deals susceptible to managerial conflicts of interest (e.g., going-private and “friendly” deals) and deals with lower announcement premiums. Their presence increases the sensitivity of deal completion to market signals. While they block a significant proportion of planned deals, activist arbitrageurs only modestly decrease the probability that the targets will eventually be acquired (including by a third party). Finally, the strategy yields significantly higher returns than passive arbitrage.

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Shareholder Rights Projectについての議論

Harvard大学のShareholder Rights Projectは,期差選任の上場会社を減少させるという成果を短期間で挙げたため,注目される存在だと思います。同プロジェクトの活動の合法性について疑義を表する論文が,スタンフォード大学の教授および現役の連邦証券取引委員会の委員から呈されました。