Quantcast
Are you getting the best rate from your broker?
Compare your broker's rates now to find out if you can save money

Choose your broker below
Welcome to Dividend.com. Please help us personalize your experience.

Select the one that best describes you
ALERT

Industrial Giant Impresses with 19% Gain

Dividend logo

It’s easy not to like corporate raiders, a.k.a. investment activists. Investors like Carl Icahn and Nelson Peltz have been called those names for taking large stakes in public companies and pressuring management to improve share-price performance, usually by cutting costs (largely by firing employees) and taking on debt for share buybacks and special dividends.

While these guys don’t merit statues in public parks, it should be acknowledged that as a byproduct of their self-seeking, they perform a valuable service. They serve as an antidote to the “agency” problem in corporate finance; the top managers of public companies are supposed to act on behalf of shareholders but instead, because they can get away with it, they ignore that fact and act like owners, taking steps to line their own pockets at the expense of the company.

Activist investors keep management alert to the need to satisfy shareholders because there’s always the possibility that some activist will swoop in and make life tough for underperforming managers and possibly get rid of them.

To read the Full Story, Go Premium or Log In

Popular Articles

Premium Shutterstock 389143408
News

Fidelity’s Six Successful Investor Habits

When it comes to retirement investing, long-term success is about 70/30. The thirty percent is...

News

Should Home Depot Be Your Exposure to the U.S. Housing Market?

Home Depot (HD ) is “just” 39 years old and yet is the biggest home improvement retailer in the...

Premium Shutterstock 230306104
News

Will Subprime Loans Take the Auto Industry Down?

The last few years have been pretty good for the automakers. Many consumers had put off buying...