How Does Activist Investing Impact Stocks?

Activist investing uses equity stakes in public companies to enact change. Here's how that can have an impact on stocks.

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Activist investing isn't a new concept. It has existed since the stock market crash of 1929, perhaps earlier. Not all activist investing campaigns have been successful, but they all have a similar goal: To increase shareholders' value and by extension, a stock's price.

Many point to Benjamin Graham's 1926 fight with Northern Pipeline as the beginning of the activist investing movement. Graham, a mentor to Warren Buffett, accumulated a major stake in the railroad company and worked with management to return excess cash to shareholders. 

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Will Ashworth
Contributing Writer, Kiplinger.com

Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.