12 Things Every Public Company Should Know About Activist Shareholders and News Media

Activist shareholders are everywhere these days. Or so it seems.

No week passes without news of a fresh attack or a continued assault on a public company from which an activist shareholder believes it can extract more shareholder value.

There is a reason for all this coverage – it is driven by the activist shareholders themselves.

Activists are among the most masterly users of media that I have ever witnessed. These guys are good.

Where will activists strike next? If you’re a public company, you might be wondering if it is you.

So here are some insights – from having served in the activist wars – that might be helpful in preparing now to mitigate the possibility of an attack or respond to an actual attack.

  1. Activist shareholders employ sophisticated and aggressive media relations programs throughout the life of their involvement with a target company – more so than any of these targets.
  2. These communications programs feature proactive media relations tactics to force their targets to respond but also retaliatory media relations tactics whenever their targets do communicate.
  3. Activist shareholder conferences on “best practices” actually include sessions with boutique PR agencies teaching activists how to use media relations in support of their campaigns.
  4. Activist shareholders have changed communications strategies as their goals have changed, with more vitriolic attacks through the media against boards and executives of target companies.
  5. Activists count more heavily than in the past on the use of the news media to affect decisions by other shareholders and to pressure boards and executives.
  6. Activist attacks through the media utilize emotional appeals as well as intellectual arguments, but always feature predetermined and pithy quotes about the target and its leadership.
  7. Activist attacks through the media follow predictable patterns – activist playbooks are simple if sophisticated – hammering again and again on a specific theme such as “unlocking value.”
  8. Activist shareholders talk and meet often with reporters who cover their campaigns while most target companies respond only with written statements and cede control of coverage.
  9. Financial media escalate coverage of activist shareholder campaigns because “power players” throughout the investment and corporate communities closely follow attacks on companies.
  10. “Superstar” journalists join and sometimes eclipse beat reporters in covering activist shareholder campaigns, largely to elevate “clicks” on their stories.
  11. Although activists court media with tremendous success, media run on a two-way street and when target companies respond – positively or negatively – then it is also a major story.
  12. Perhaps owing to their months of preparations before going public in targeting a company, activists invariably are surprised when a target deftly uses the news media in its own campaign. The reason activists are surprised, is that this does not often happen.

Activists have a communications playbook. Do you?

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