Factor 5: Historical Context

To figure out how activists operate, it first is necessary to understand their roots. Where they came from explains a great deal about their present strategy. Corporate raiders of the 1980s, the forefathers of today's agitators, have inspired and educated many present-day activists. In fact, activists today probably would not exist without the groundbreaking insurgencies of these predecessors.

But even before the 1980s, there were shareholders agitating for change at companies, though there was only a handful at any one time until now. In the 1940s and 1950s, investors such as Thomas Mellon Evans, Louis Wolfson, and Leopold Silberstein pressed undervalued companies they believed had too much cash on their balance sheets into making changes. In many ways that period represented the Wild West of activism because it took place before a regulatory regime existed that required any serious disclosures of investment information. These insurgent investors could buy huge stakes in companies, before anyone knew they were there. Diana Henriques explains in her book White Sharks of Wall Street how Wolfson succeeded in his goal of provoking change at Montgomery Ward, a catalog retailer based in Chicago, Illinois.⁸