US investor Elliott Management bought a significant stake in both PayPal and Pinterest.
👉 Background: Elliott Management is a US investor with $55.7 billion USD under management. It has a pretty big reputation for making some bold moves.
👉 What happened: In the past, Elliott Management has bought big stakes in Twitter and AT&T so that it could push for big changes. Now, it has bought a significant stake in both PayPal and Pinterest.
👉 What else: Not just any stake. Elliott Management is now the BIGGEST shareholder in both companies and these massive stakes will likely be used as part of an activist investment strategy.
💡An activist investor buys a stake in a company to put pressure on its management to do ‘something’. Ultimately, the goal is to raise the company’s value. And there are a couple of reasons why this is happening so often at the moment.
💡Numero Uno. There's a growing awareness of environmental, social and governance concerns (ESG). Activist investors are pushing to have climate-focused board members on Boards of oil and gas companies (like Exxon)
💡 Secondly, there is a pretty big 'tech wreck' happening right now… so naturally, activist investors are just sniffin' out a bargain.
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