Activist Investor
An activist investor (also known as an activist shareholder or shareholder activist) is an individual or group of individuals who purchase large numbers of a public company’s shares and/or try to obtain seats on the board of directors in order to influence and change corporate policies they believe are detrimental to the company’s value. Activist investors often use tactics such as filing lawsuits, engaging in proxy battles, organizing boycotts, or using public pressure campaigns against corporations.
The goals of these efforts may include increasing short-term profits for shareholders, replacing management with more competent officers, increasing dividends, changing accounting practices that have allowed executives to enrich themselves at shareholders’ expense, opposing takeovers by other companies which would dilute ownership percentages for existing shareholders, spinning off divisions into separate entities which could increase profitability through increased focus and efficiency in each division, or any number of other initiatives aimed at improving corporate performance.
Cryptocurrency activists typically target existing cryptocurrency businesses by buying large amounts of tokens (in some cases up to 30% or more) and then attempting to influence decisions about how the business should be run. They can also attempt to acquire board seats so that their views are represented when important decisions are made about investing strategies going forward. As cryptocurrency is still relatively new compared to traditional assets like stocks and bonds it has become increasingly popular among activists given its potential for higher returns due its rapid growth.
