| dc.description.abstract | This paper examines the causes and results of shareholder activism by hedge funds over the past twelve years. The overall purpose of the study is to compile financial data to understand if hedge fund activism provides value to the target companies. As shareholder activism in the United States has been an increasing trend, my thesis attempts to explore why hedge funds engage in activism and if this involvement enhances a company's stock price and firm performance. My results showed that there were abnormal stock price returns to the target firms the day after the 13D filing, three days after the filing, and one-month after the filing. Firm performance, as shown through return on equity and return on assets, actually decreased by approximately 50% in both cases one-year after the 13D filing. In conclusion, my analysis shows that in the short-term, value is provided to the stockholders of the target firm. However, long-term it is difficult to determine if shareholder value by hedge fund provides value. | |
