Goldman's Mehrotra: Some Companies Are Facing a Swarm of Activists

The video discusses the rise in activist activities targeting large companies, particularly in the tech sector. It highlights the shift from M&A to operational focus due to market conditions and the importance of governance and board profiles in defending against activist swarming. The video also explores the challenges faced by companies with multiple activists and the strategies they can employ to protect themselves.

What is a key difference between 'swarming' and 'wolf pack' activism?

• Swarming involves multiple activists with potentially conflicting demands.

• Wolf pack activism is a new trend in the market.

• Wolf pack activism targets only small companies.

• Swarming involves coordinated efforts among activists.

Why is the tech industry particularly vulnerable to activist investors?

• Tech companies have not expanded since COVID.

• There is a shift from growth to value stocks.

• Tech companies are immune to activist strategies.

• Tech companies have reduced their headcount significantly.

What has caused activists to focus more on operational improvements?

• A slowdown in M&A and private equity activities.

• A decrease in public market volatility.

• A rise in tech company valuations.

• An increase in M&A activities.

How do private markets influence public market activism?

• Activists only focus on public markets.

• Public markets dictate the trends in private markets.

• Private markets feed into IPOs and M&A, affecting activism.

• Private markets have no impact on public markets.

What is a crucial factor in defending against activist investors?

• Having a large number of board members.

• Maintaining a proactive management approach.

• Ignoring activist demands.

• Reducing company transparency.

How can a company ensure it is relatively safe from activist attacks?

• By having a static board composition.

• By maintaining strong absolute and relative performance.

• By avoiding any form of capital return.

• By having a high debt-to-equity ratio.

What challenge do companies with concentrated voting rights face?

• They have no governance issues.

• They may deter activists but are not completely protected.

• They have difficulty in getting board seats.

• They are immune to activist interventions.