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Margin trading shareholder activists

Author

Listed:
  • Manuel Almagro
  • Jan-Oliver Strych

Abstract

We examine margin trading activists that we define as shareholders that are identified by Schedule 13D filings and state therein that they may use margin borrowings to finance their holdings. We find that arrivals of margin trading activists are associated with positive target announcement returns compared to those of non-margin trading activists. This indicates that margin trading activists’ arrivals are perceived as signals of positive future target firm performance. Moreover, we find that their investment horizon is likely contingent on how long they have invested in the targets prior to their filings or whether markets react positively to their arrivals.

Suggested Citation

  • Manuel Almagro & Jan-Oliver Strych, 2022. "Margin trading shareholder activists," Applied Economics Letters, Taylor & Francis Journals, vol. 29(5), pages 437-441, March.
    • Handle: RePEc:taf:apeclt:v:29:y:2022:i:5:p:437-441
    DOI: 10.1080/13504851.2020.1869163
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