As a small-cap investor relations officer, you might not spend too much time thinking about activism in your equity. That only happens to the world’s largest companies, right?

After all, it’s usually only large-cap activists like Carl Icahn and Daniel Loeb who make the biggest splashes in the media. Headline after headline focus on campaigns targeting large-cap companies, such as the landmark shakedowns of Exxon Mobil and Chevron that happened during the pandemic.

While these large-scale rebellions get the most attention, they represent only one side of investor activism. In reality, small-cap companies such as yours are an open target for activists, too.

What is Investor Activism?

Activism is an offensive strategy in which an investor acquires enough shares to hold considerable sway over proxy-voting season. Individual and institutional investors employ activist campaigns to claim seats in the boardroom and make sweeping changes to the company.

Today’s activist has a laser focus on ESG issues. Environmental, social, and governance campaigns accounted for a whopping 81% of all campaign in 2022.

How Can Small-Cap Investor Relations Prepare for Activism?

An activist investor isn’t always an outside player gobbling up shares in your company. In many cases, activism is happening inside your stock with existing shareholders. Keeping an eye on these players can help insulate your brand from a hostile takeover.

As a small-cap company, you may not have the resources or time to put apply this kind of surveillance on your shareholders — especially when targeting tasks take priority.

In situations like this, an IR consulting firm like Q4 recommends leaning on technology to help you look out for activists. Engagement analytics software automatically tracks shareholder movements with your brand, freeing you up to focus on other matters without sacrificing security.

As an example, the new Q4 engagement analytics aggregates and visualizes pertinent engagement metrics harvested from your vast IR platform. Engagement analytics software delivers these insights in a simple dashboard that allows you to focus on individual and institutional investors as they interact with your IR website, CRM IR app, and capital markets virtual events.

Using this information, you can spot red flags in investors’ online activity and behavior that could indicate they’re gearing up for a big move.

You can pair this self-serve engagement analytics software with hands-on surveillance services. Surveillance services rely on real-time monitoring by experienced analysts who look at intra-quarter DTC settlements with equity and options trading to reveal you shareholder composition.

Together, engagement analytics and surveillance peel back the curtain on your investors, giving you the means to understand shareholder motive. You can identify patterns that indicate you could be the focus of a campaign soon.

With this early warning, you can be ready to pivot strategically to whatever comes your way.

Activism is on the Rise This Year

Activism has been on a steady incline. According to S&P Global, investor activism broke records last year, when more than 1,000 campaigns were launched.

Early reports from Lazard, an activist tracking firm, reveals 2023 will be another banner year for activism. Its team has counted 69 new campaigns in just the first quarter of this year alone.

Knowing these numbers, you can’t stand to ignore activist this year.

Tracking your base and understanding what motivates them is one of the best ways to prepare for activism. Consider adding engagement analytics and surveillance to your bag of IR tools — even if you are a small-cap IRO.