In the stock market, there are many types of investors. We have the classic value investor, the modern growth investor, and people who are in between. There are technical investors, and speculative investors too. However, an activist investor is one of the more powerful investors, and for good reason too.
Activist investors buy a massive stake of a company’s shares to have an influence on company decisions. This is because large stakeholders often hold seats in the company’s board of directors, who vote on company decisions. Famous activist investors include Carl Icahn and Bill Ackman, two legendary investors that hate each other but succeed with the same style.
For the last month, activist investing has had a major impact on ExxonMobil. Yes, oil is in the news once again. Remember when we got good news from the oil industry? COVID came, and when the recovery was finally starting, alternative energy arrived. I mean, it was inevitable for the oil business to die down with how much impact it has on the environment. Not only is this my opinion, but Hedge Fund Engine No. 1 feel the same.
Engine No. 1 is the activist Hedge Fund that has been pushing to join the ExxonMobil board for months. They wanted to confront Exxon over their lack of adaptation to the current climate crisis, which has been a point concerning many shareholders. However, CEO Darren Woods didn’t feel the same, and lobbied against Engine to prevent them from getting the seats.
This push was unsuccessful as it was announced on Wednesday that Engine gained two seats on the board, which marked a historic move for Exxon. Shareholders like BlackRock supported the Engine candidates, a major deal due to how large BlackRock is in the investment community. This also marks a possible change in leadership, with Woods looking unfit for the job. All eyes are now on Engine to see their impact on the company, and the environment hopes they succeed. What do you think about Exxon’s future?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.