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Any bump in a stock price driven by an activist investor evaporates within a year, and even early gains aren’t as robust as they once were

Key Points

Activist investing—where an investor buys up a large amount of a company’s shares and then pushes the company to make changes to its board or operations—is a high-risk and potentially high-reward proposition.

For billionaire investors like Carl Icahn, Bill Ackman and Dan Loeb, it has been especially lucrative over the years, despite some high-profile misses. But should the strategy be one that the average investor follows?

In short: While following an activist campaign can add a temporary boost to your portfolio value, the gains dissipate over the 12 months following the campaign.

To conduct our research, my assistants (Richard Tamirisa and Luigi Bilibio) pulled all activist campaigns against U.S. companies over the past 10 years. To be included in the sample, the activist must have either issued a 13D securities filing (which signals intent of some sort of activist campaign) or acquired a stake of greater than 1% and publicly disclosed an activist campaign against the company.

With this data set, we then looked at a company’s returns in the day before, the day of and the day after an activist announcement and then the one-year returns. For all returns, we looked at excess returns where we subtracted the returns of the S&P 500 to normalize returns for all market conditions.

The first interesting finding is that jumping in early when a campaign is announced used to be more profitable than it is today. For instance, the median excess returns during the three-day window surrounding the announcement of an activist campaign was 0.21 percentage point from 2015 to 2019. That median excess return has dropped to minus 0.06 percentage point from 2020 to 2025.

We see a similar story with average returns, where the average excess return was 0.46 percentage point from 2015 to 2019 but has fallen to 0.34 percentage point from 2020 to 2025.

When we look at the one-year returns, we also find some interesting results: Namely, most of the returns an investor can extract by following an activist campaign come in the first two to three months. The median peak excess returns for an activist campaign occur two months after an announcement, at around 2 percentage points. After month two, excess returns dissipate and go negative by month five.

When we look at average excess returns, we see a similar but amplified dynamic. Average cumulative excess returns following a campaign plateau around month two to month six at 5.3 percentage points, but then dip by month 12.

These differences between average returns and median returns highlight that it is just a few activist campaigns that are driving most of the excess returns. Drilling down into the data, we see that it is the activist campaigns that result in a company sale that drive a lot of the excess returns—as was the case when an activist campaign by Barry Rosenstein’s Jana Partners forced the sale of Vonage Holdings to Ericsson for a 50%-plus gain for the activist.

And investors should know that this strategy of following an activist campaign does come with risks. If an activist campaign fails—for instance, if the sale of a company isn’t achieved—then we note that returns can quickly evaporate or turn negative.

In sum, if you are looking to juice your portfolio returns by following an activist investor campaign, you may be able to achieve some excess returns over the first few months after buying into a campaign. Beyond that brief period, you are subject to significant downside risk if the activist campaign goes belly up.