What is the significance of activist investors on Wall Street?

Activist investors are a group of investors who purchase shares in a company and then use their ownership position to influence the company's decisions. They seek to increase the company's value by pushing for changes in the company's strategy, leadership, or operations.

The significance of activist investors on Wall Street is that they can bring about changes in underperforming or undervalued companies, creating value for shareholders. Their involvement can lead to changes such as cost-cutting measures, divestitures, and mergers and acquisitions. Activist investors also bring attention to corporate governance issues, such as executive compensation and board composition.

However, their involvement can also create tension between the company's management and the activist investors. Some argue that activist investors prioritize short-term gains over long-term growth and that their tactics, such as proxy fights and public criticism of the company, can harm the company's reputation and performance.