COORDINATED SHAREHOLDER ACTIVISM IN THE UNITED STATES: DETERMINANTS AND OUTCOMES

Abstract

Using a large data set from 1992 to 2011, I examine the determinants and outcomes of coordinated filings of 13Ds by activist investors. I find that activist shareholders in the United States prefer joining their actions against firms that are larger in size, more undervalued, and have lower institutional ownership. While there is no clear evidence on the announcement effects of coordinated activism as compared with activism by a single shareholder, the announcement returns of coordinated activism increase with the number of participating funds in the coalition. Ceteris paribus, coordinated activism yields better returns when the coalition members are geographically proximate to one another. My analysis provides a new insight into corporate governance in the context of collaboration among activist shareholders.