Myth or Fact: Do Activist Investors Break Up Companies?

The video discusses the strategies of activist investors, highlighting figures like Carl Icahn and Nelson Peltz. It explores how activists like Starboard and Bill Ackman use mergers and acquisitions to create value, such as Burger King's acquisition of Tim Hortons. The rise of activist investors is attributed to the difficulty of outperforming the market with traditional funds, as explained by Robert Kaplan. The video also covers Nelson Peltz's successful activism with companies like Wendy's and Family Dollar.

What is one of the strategies used by activist investors like Starboard with Yahoo?

• Reducing workforce

• Breaking up companies

• Merging companies

• Liquidating assets

Why is it easier for activists to take on bigger targets today?

• They have a larger market share

• They rely on traditional investment methods

• Institutional investors are more receptive

• They have more financial resources

What challenge do mutual funds and hedge funds face according to the Harvard professor?

• Lack of investment opportunities

• Difficulty in outperforming the market

• High operational costs

• Regulatory constraints

Which company did Nelson Peltz help turn around as an activist investor?

• PepsiCo

• Family Dollar

• DuPont

• Wendy's

What was one of the outcomes of the Tim Hortons spinoff for Wendy's?

• Increased market share

• New product lines

• Exposed weaknesses

• Higher stock prices