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IHS Markit Perspectives - Shareholder Activism - Part 10

12 October 2020

In our tenth installment, we ask market participants whether they believe shareholder activism should be seen differently in light of the current environment. Highlights include:

Some investors and analysts note that activism plays a critical role in a free market and thus do not believe it should change depending on the market environment, especially if the focus remains on the long-term investment case.

"It seems like activists tend to target management teams that deserve a bit of a push. It is generally healthy. As a management team, you should be open to what they have to say."

A few investors and analysts assert that the current market volatility specifically provides a unique advantage for activist activity.

"There has been very narrow valuation dispersion for several years, but now some energy companies are down 90% while some Chinese companies are flat. There is a lot more valuation spread, which incentivizes activism."

Many investors and analysts suggest that activism should be put on hold given the volatility and uncertainty at the moment.

"I feel it is best to keep the shareholder activism on hold at this moment. This is because no one knows what is going on in this time of crisis. Instead of shareholders telling companies what to do, it is better to just let the companies do their job."

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Moderated by Michael Miller, Director of IR Advisory, Madison Coffing from the Corporate Shareholder Identification Group and Alexi Meghir from the Perception team discuss these findings as part of the IHS Markit Perspectives Series Podcast. To hear the complete podcast:

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IHS Markit's Perception team will continue to gather real-time market feedback as the situation unfolds, so please look out for the next part of this series.

View Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, and Part 9.

IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.


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