Here's a paradox: Activist investing had been booming during the past few years, and now the market has collapsed, driven in large part by incompetent management and poor corporate governance.
So now that the stuff has hit the fan, you might think that activists would be entering a golden age, empowered by the value destruction plaguing so many companies. Writing in Barron's, Ken Squire recently argued that in fact we are entering a new "golden age" for activist investing. But I am skeptical. In a post on DailyFinance, I argued that the downturn in mergers and acquisitions activity was eliminating one of the favorite tactics of activists -- pushing firms into the hands of private equity or strategic buyers. Without that options, activists would be hard pressed to create value quickly enough to satisfy investors.