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Aggressive Tech Activists Aren’t Benefitting Stocks

Technology companies are increasingly in activist investors’ crosshairs. But on average, the target companies’ share prices have little to show for it. 

Of the thirteen most high-profile battles between technology companies and activist hedge funds over the past two years, only six of the target companies saw their shares rise more than the Standard & Poor’s 500 Index.

Some of those that outperformed: Yahoo and Microsoft. The first was targeted by Daniel Loeb in September 2011. Its shares have jumped about 160% since he bought the stock as investors expect that Alibaba Holdings, an Asian e-commerce company in which Yahoo holds a stake, will soon go public. Shares of Microsoft, which stagnated until CEO Steve Ballmer announced he was stepping down last year, are up about 20% since last April when hedge fund ValueAct Capital began agitating for a board seat.

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Nuance Communications has been a black eye for Mr. Icahn. The company’s stock is down about 25% since Mr. Icahn revealed a large stake in the speech recognition technology maker last April.

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Joe Lonsdale
Joe Lonsdale
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Chamath Palihapitiya
Founder & Managing Partner, SocialCapital
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Tina Sharkey
CEO, Brandless
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Jonah Peretti
CEO, Buzzfeed
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Ruchi Sanghvi
Ruchi Sanghvi
VP Operations, Dropbox
"Investors are taking aim at tech companies because their growth is slowing and they are flush with cash."