Ryan Nebel Quoted in Diligent on Activism Post-IPO

Vice Chair of Olshan’s Shareholder Activism Practice Group Ryan Nebel was quoted in a Diligent Market Intelligence article (subscription required) entitled “Activists Bide Their Time Post-IPO.” The article explores the sharp increase in companies going public in recent years, with IPO activity jumping 70 percent in the past year. According to Diligent Market Intelligence data over the past half-decade, the likelihood of activism increases three or four years after a company goes public: over 70 U.S.-based companies that have gone public since 2020 have faced activist demands, with 59 companies targeted since 2023. There is no “grace period” for companies to enjoy after going public, Ryan commented. With issues such as performance and valuation in mind, activists are more likely to operate on a “company-by-company basis,” with hurdles such as dual class shares—which are popular among new listings, particularly in tech—likely to determine how soon any activist makes its move. The article goes on to explain that newly public companies typically come with governance and control structures that, if not explicitly aimed at denying activists a potential opening, ensure some continuity with pre-listing structures. “Whether the juice is worth the squeeze from the activist perspective will likely be dependent on the governance structure and what type of protections are in place,” Ryan said, explaining that such protections “make it a far more difficult and uphill battle for an activist to the point where it may not be worth it.” However, Ryan cautioned that companies should think twice before adopting such governance provisions that limit shareholder rights because doing so may ultimately harm their valuation.