Corporate Raider

What is a 'Corporate Raider'

A corporate raider is an investor who buys a large number of shares in a corporation whose assets appear to be undervalued. The large share purchase would give the corporate raider significant voting rights, which could then be used to push changes in the company's leadership and management. This would increase share value and thus generate a massive return for the raider.

BREAKING DOWN 'Corporate Raider'

Companies have used a variety of strategies to thwart the efforts of corporate raiders. These include shareholders' rights plans (poison pills), super-majority voting, staggered boards of directors, buybacks of shares from the raider at a premium price (greenmail), dramatic increases of the amount of debt on the company's balance sheet and strategic mergers with a "white knight."

Famous corporate raider Carl Icahn used tactics such as taking a company private, compelling a spin-off, calling for an entirely new board of directors or calling for a divestiture of assets to make a fortune with his hostile takeovers.

RELATED TERMS
  1. Raider

    An individual or organization that tries to take over a company ...
  2. Premium Raid

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  3. Greenmail

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  5. Icahn Lift

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RELATED FAQS
  1. Why is a shareholder rights plan called a "poison pill?"

    Discover why shareholder rights plans are often called "poison pills" to fight hostile takeovers and give smaller corporations ... Read Answer >>
  2. What is the difference between a hostile takeover and a friendly takeover?

    Learn about the difference between a hostile takeover and a friendly takeover, and understand how proxy fights and tender ... Read Answer >>
  3. What can shareholders vote on?

    Understand the usual voting rights of common stock shareholders, along with the importance of shareholders exercising their ... Read Answer >>
  4. How do a corporation's shareholders influence its Board of Directors?

    Find out how shareholders can influence the activity of the members of the board of directors and even change official corporate ... Read Answer >>
  5. How can a company resist a hostile takeover?

    Learn about some of the defense strategies a public company's board of directors might employ to prevent a hostile bidder ... Read Answer >>
  6. How effective is a poison pill defense against a hostile takeover?

    Learn about the different types of poison pill strategies that target companies use to prevent hostile takeovers, and understand ... Read Answer >>
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