Review of Financial Studies Vol. 37 No. 5 2024
Short Campaigns by Hedge Funds
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.
- DOI
- 10.1093/rfs/hhad092
- Volume
- 37
- Issue
- 5
- Pages
- 1460-1493
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref