Hedge Fund Activism, Voice and Value Creation

We construct a novel hand-collected large dataset of 205 U.S. hedge funds and 1025 activist events over the period 2005–2013, which records both the Schedule 13D filing date and the voice date, and explore the role of voice in value creation. We employ alternative inferential statistical approaches, including parametric, non-parametric, and heteroscedasticity-robust tests. We reveal that the voice date is important in creating short-term firm value and provide strong evidence that voice is associated with positive abnormal returns. These findings suggest that voice leads to information revelation, with implications for U.S. stock market arbitrage.