The Wall Street Journal

Should You Buy a Stock Targeted by an Activist Investor?

Any bump in a stock price driven by an activist investor evaporates within a year, and even early gains aren’t as robust as they once were

Should You Buy a Stock Targeted by an Activist Investor?
Illustration: Sean McCabe

Activist investing—where an investor buys up a large amount of a company’s shares and then pushes the company to make changes to its board or operations—is a high-risk and potentially high-reward proposition.

For billionaire investors like Carl Icahn, Bill Ackman and Dan Loeb, it has been especially lucrative over the years, despite some high-profile misses. But should the strategy be one that the average investor follows?

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