Work

Short Campaigns by Hedge Funds

Year: 2023

Type: article

Abstract: The number of short campaigns by hedge funds has dramatically increased over the last two decades. Nearly 80% of campaigns are undertaken by activist hedge funds, particularly those that employ hostile tactics in their long campaigns. Short campaigns are associated with negative abnormal returns of –7%, with aggregate valuation effects similar in magnitude to the gains from long activism campaigns. In contrast to long campaigns, public communication is a critical component of short campaigns. We do not find evidence that such communication is manipulative. Overall, our analysis highlights the importance of short campaigns for understanding the economic impact of activist hedge funds.

Source: Review of Financial Studies

DOI: 10.1093/rfs/hhad092

Authors: Ian Appel, Vyacheslav Fos

Institutions: University of Virginia, Boston College, Center for Economic and Policy Research

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W4389525199

FWCI: 3.792

Cites: 43

Cited by: 27

Related to: 10