Business Case Studies & Business Publications

Activist Investors and Corporate Strateg...

Hou, Young, Kaloge...

Case

Activist Investors and Corporate Strategy

Hou, Young; Kalogeropoulos, Demitri

S-0458 | Published July 21, 2025 | 10 Pages Case

Collection: Darden School of Business

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In the 2020s, the number of activist investor challenges rose significantly. Activist investors demanded a range of strategic changes at the companies they targeted, and they often attacked large, well-known enterprises. Members of a targeted company’s management team could respond in several ways. They could publicly advocate for their positions to fend off change, engage directly with the activist investor to negotiate, or settle with the activist by agreeing to the proposed changes. These strategic changes might involve capital allocation plans, mergers and acquisitions (either for or against), cost cutting, growth and profit margin performance, or a shake-up in the board of directors. Were activist investors ultimately helpful to the businesses they chose to disrupt? Companies tended to consider them important risk factors, while shareholders often welcomed their arrival, as shares of targeted companies tended to jump in value. This public-sourced case offers an introduction to activist investors and discusses three activist campaigns: Trian Partners versus The Walt Disney Company, Elliott Investment Management versus Southwest Airlines Co., and Icahn Enterprises versus Illumina Inc. At the University of Virginia Darden School of Business, it is taught in the second-year “Corporate Strategy” elective.