Ben Franklin said only two things were certain in life – death and taxes – but it sure seems like shareholder activists also find a way to persist no matter the conditions. According to this Barclays update, the number of shareholder activist campaigns increased in Q1 this year compared to 2025 – at least in the US. This mid-year update from Olshan identifies the key drivers so far this year. Here’s the intro:
A strong 2025 for shareholder activism has carried forward into the first half of 2026, with a variety of significant activist engagements and campaigns this proxy season. Activist campaigns have largely focused on operational, strategic, capital allocation, and governance-related improvements, with new activity in the M&A and IPO markets expected to impact activist demands and the corporate governance landscape overall.
Settlement agreements remain a key means for activists to change the composition of boards of directors, and C-suite turnover prior to and following campaigns reinforces the importance of succession planning and accountability in the boardroom. The evolving regulatory environment, geopolitical uncertainty, and a shift in institutional investor engagement have also impacted this proxy season, with the growing importance of AI also playing a significant role.
Many of us are pondering what types of trade-offs companies may face if the SEC moves to a more principles-based disclosure framework. The Olshan team offers these thoughts:
The evolving regulatory landscape continues to impact companies and activists this proxy season. Following last year’s 13G/13D guidance affecting engagement between companies and investors, the SEC is proposing a number of significant rule changes in an effort to encourage companies to become and remain public, as part of its “Make IPOs Great Again” agenda. These include proposed changes to securities offering disclosure rules and a proposed rule to give public companies the option to file periodic reports on a semiannual rather than quarterly basis. If semiannual reporting becomes available as an alternative, we expect that many companies will continue to report on a quarterly basis (at least initially) or find other avenues for providing investors with material financial information, and those that do not will likely face criticism for lack of transparency, and potentially see negative implications in director elections. If the financial information flowing to investors changes, investors will need to adapt their approaches to monitoring and engaging with companies. We do not expect that would significantly affect the volume of activist activity, but it may have an impact on the timing and cadence of campaigns, and lead to changes in governance best practices promoted by institutional investors and proxy advisors.
The SEC has also proposed rule changes that would make significantly more public companies qualify for exemptions from mandatory “say-on-pay” votes, pay-versus-performance disclosures, and auditor attestations of internal controls over financial reporting. If adopted, these changes would similarly decrease the information investors have available and eliminate certain compensation-related data points that activists have historically used to help identify potential targets, gauge investor sentiment and support their campaigns. For most proxy campaigns involving seasoned activists, however, executive compensation is just one of the multitude of issues that activists can point to while making their case for change, with concerns surrounding performance, strategy, operations, capital allocation and governance remaining at the forefront.
In this 31-minute episode of the “Mentorship Matters with Dave & Liz” podcast, Dave and I were delighted to continue our conversation about Hollywood portrayals of securities law issues and securities lawyers – again featuring enthusiastic color commentary from Charles Lee, who serves at the SEC as Senior Advisor, Office of the Chairman, and Ted Yu, who serves at the SEC as Associate Director of Specialized Policy & Disclosure in the Division of Corporation Finance. In this episode, we discussed:
1. Board and compliance dynamics in “Billions.”
2. Schedule 13D anarchy in “Other People’s Money.”
3. Hollywood’s take on shareholder meetings.
4. Why IPOs are an underutilized securities law plot.
5. Honorable mentions for favorite securities law movies and tv shows.
6. SEC Historical Society’s list of securities law in film, radio, and television.
7. Wrap-up thoughts on securities law in Hollywood.
If you missed Part 1 of this conversation, you can check out Dave’s recent blog about it – and all of our prior episodes are available in our podcast archive.
In both episodes, Charles and Ted were speaking with us in their individual capacities – and as always, the SEC disclaims responsibility for any private publication or statement of any SEC employee or Commissioner, and this podcast expresses the speakers’ views and does not necessarily reflect those of the Commission, the Commissioners or other members of the SEC staff.
Thank you to everyone who has been listening to the podcast! If you have a topic that you think we should cover or guest who you think would be great for the podcast, feel free to contact Dave or me by LinkedIn or email.
While scholarship continues to discuss the historical affects of films on the American public, there is little exploration of the portrayal of U.S. financial markets in motion pictures. Financial markets are a large part of the American economy and culture. Moreover, movies have depicted markets, misdeeds, and regulation since the invention of silent film. By studying the various ways American movies have shown the image of the markets, nature of financial misdeeds, and the role of regulation over the past century, people can begin to consider how film may have reflected and shaped public perception of financial markets.
Dr. Miller calls on scholars to reflect on and synthesize how films about financial regulation reflect and shape public views. I can’t promise “scholarship,” but maybe we’ll do another podcast at some point! Also check out this page from the SEC Historical Society – with film, radio, and tv clips through the years of the SEC and financial markets in action.
In remarks last week at the US Chamber Capital Markets Summit, Corp Fin Director Jim Moloney recapped how the SEC’s recent proposals to reform registered offering rules and filer status thresholds would work together to simplify the hodge-podge of registration and reporting rules that seem to be a hurdle for companies looking to access the public companies – especially small- and mid-sized companies. Since we take a lot of cues from Corp Fin, Jim’s perspective is helpful for piecing things together (Jim gave the remarks in his official capacity, but as always they don’t necessarily reflect the views of the Commission, any Commissioner, or staff, etc. etc.). Here’s an excerpt:
While these Proposals may look like “new builds,” the design blueprints are time-tested. These Proposals, if adopted, would impact how public companies register securities and report to investors. I will point to just one example from each proposal to demonstrate how impactful these rules could be.
The Registered Offering Reform Proposal, if adopted, would give smaller public companies access to shelf registration for the first time in decades, increasing the number of eligible companies by more than 60 percent.[5] It would rewire the house to support the higher amperage of capital flows required today. Consider a small, pre-commercial biotech company that successfully completed an IPO within the past year, but that needs to conduct a follow-on offering to raise additional capital to further its clinical trials. The company cannot wait weeks or months for SEC review of its registration statement that repeats much of the same information already provided to investors in its IPO registration statement. But, under the current rules, that’s exactly what companies have to do.
Form S-3, the vehicle for shelf registration, currently requires a $75 million public float and a 12-month reporting history — thresholds set in the 1990s that today shut out companies that have earned their place in the public markets and need to raise capital on their own timelines. The Registered Offering Reform Proposal would replace these obsolete thresholds with two simple questions: (1) Is this company an “ineligible issuer”?[6] and (2) Is this company current and timely in its SEC reporting?[7]
The Filer Status Proposal would take the same approach to disclosure. Right now, SEC rules sort public companies into five different compliance buckets, some overlapping. The proposal, if adopted, would raise the Large Accelerated Filer threshold from $700 million to $2 billion in public float, reserving the most demanding disclosure rules and reporting deadlines for the largest corporations.[8] For everyone else – 81 percent of all public issuers, although only 6.5 percent of total market public float[9] – the amendments would likely result in reduced audit fees and other costs. The current system has a leaky roof and sagging floorboards, and this proposal would alleviate these signs of structural stress.
Some companies become subject to auditor attestation of internal controls[10] before generating a single dollar of revenue, simply because the companies’ market value crosses the accelerated filer threshold at one specific testing date. One biotech company in particular reported spending around $11 million on that compliance obligation alone since it crossed the $700 million public float threshold in 2021, roughly the cost of running a large Phase 2 clinical trial.[11] Under the thresholds in the proposal, many companies would be able to instead deploy that capital to further their business operations.[12]
Jim noted that all of the recent proposals are currently open for comment. Additionally, as Meredith shared a couple weeks ago, SEC Chair Paul Atkins has opened a new comment portal specifically for IPO modernization. Jim’s remarks call out that the SEC is looking for companies as well as investors. Building on another recent blog from Meredith, here are all the upcoming comment deadlines:
Earlier this month – June 6th – the SEC celebrated its 92nd birthday. That was the date the Securities Exchange Act, which created the Commission, was signed into law. In a speech last week, Commissioner Hester Peirce paid tribute to where the SEC has been and where it’s going. That got me thinking that it would be fun to pull together a few of the blogs we’ve shared through the years to mark the SEC’s existence. Here are a few highlights:
Speaking of milestones, Commissioner Peirce also noted in this speech – titled “Peirce Out” – that she’s moving to the beach in the not-too-distant future. I’m not exactly sure when Commissioner Peirce’s last day is at the SEC, but as Meredith shared, she’s starting a new gig at Regent University School of Law this fall. It will be the end of an era!
Looking ahead to what’s on the horizon for the SEC during these exciting times, the agency announced last week that John Moses has been appointed Director of the Office of Investor Education and Assistance, which provides services and resources to help investors build their financial futures and protect against investment fraud. John has been at the SEC since 2016 and has been serving as Acting Director of this Office prior to his permanent appointment. His background before joining the SEC was in real estate, operations, and the US Navy.
The latest issue of The Corporate Counsel newsletter has been sent to the printer. It is also available now online to members of TheCorporateCounsel.net who subscribe to the electronic format. The issue includes the following articles:
– ‘Form 10-Q for Thee, But Not for Me?’ SEC Proposes Optional Semiannual Reporting
– ‘Everybody into the Pool!’ SEC Proposes to Overhaul Rules for Registered Offerings
– The Great Filer Reset: SEC Proposes to Streamline Filer Status Categories
Email info@ccrcorp.com or call 1.800.737.1271 to subscribe to this essential resource!
Say what you will about Elon Musk, the man has an uncanny ability to attract eyeballs, and his gargantuan SpaceX IPO, which priced last night, is the latest example of that. Like everything Elon does, this deal is incredibly controversial, and for good reason. Let’s just check off a few of the hot debating topics, shall we?
– Valuation. The IPO’s initial public offering price values SpaceX at $1.77 trillion, which is a mere 100x revenue. NYU’s valuation guru Aswath Damadoran says it’s worth more like $1.25 – $1.35 trillion. Morningstar throws the proverbial turd in the punchbowl and says it’s worth $780 billion, or less than half the IPO valuation – and they’re far from the only valuation skeptic. Who’s right? The answer to that question should play out over the course of the next several months, because to paraphrase Rasheed Wallace, “Aftermarket Don’t Lie.”
– Uh, About the Aftermarket. . . Buckle your seatbelts. This deal is expected to have one of the most volatile aftermarkets in history. Even though this will be the largest IPO of all time, it only represents about 5% of SpaceX’s outstanding shares, and that small float is usually a recipe for volatility. Despite the sky-high valuation, it looks like there’s reason to expect a big opening day pop, but how the stock performs over the next several months is anybody’s guess.
– OutsizedRetail Allocation. One of the things you can usually count on with an IPO is that if it reaches down into the lower rungs of retail investors, it’s because there’s not enough smart money demand for the deal. In this case, SpaceX took the unusual step of locking in a price last week, and allocating up to 30% of the deal to retail investors. That put the squeeze on the banks to get investors to sign up for a price that’s locked in at a very high valuation despite, among other things, the past week’s tech rout, and they’re responding with unprecedented outreach to retail. Based on recent reports, it looks like institutional demand may well eat into that allocation, but if retail does end up with 30% of the deal and it tanks, it won’t take long for the politicians to get their knives out for everyone involved.
– Must Love Musk. Anyone who buys SpaceX stock should realize that although the company has a board of directors, its role is purely decorative when it comes to control over the Mercurial Mr. Musk. That’s because, as the prospectus discloses, “removal of Mr. Musk from his board and leadership roles (Chief Executive Officer and Chairman of our board) requires the approval of the holders of at least a majority of the voting power of the outstanding shares of Class B common stock, voting separately as a class.” I’ll give you three guesses as to who owns over 90% of the Class B common stock, and the first two don’t count.
– Prospectus “Sizzle” Aplenty. Meredith has already weighed in on what a great beach read this 277-page prospectus would make, but what struck me – as it usually does with IPOs – was the mission statement. This is going to sound like an old man yelling “get off my lawn!” but on behalf of those of us whose understanding of the IPO process is based mostly on 20th Century experience, I’ve got to ask – when did it become okay for companies to include overheated mission statements like what’s set forth below in their prospectuses?
Our mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars. To do this, we have formed the most ambitious, vertically integrated innovation engine on (and off) Earth with unmatched capabilities to rapidly manufacture and launch space-based communications that connect the world, to harness the Sun to power a truth-seeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the Moon and cities on other planets
If you fed this into Elon’s Grok and asked it to summarize it in one sentence, my bet is that it would come up with something very much like “To Infinity – And Beyond!” Elon’s definitely channeling his inner Buzz Lightyear with this one. And don’t even get me started on the photos – we old folks used to laughingly use rocket ships blasting off as the classic example of prospectus graphics that were certain to be non-starters with the Corp Fin reviewers. This prospectus has 18 pages of them!
As my investment banker friends might say, this deal obviously has “a lot of hair on it,” but you can also understand why it’s gotten so much hype. Take Morgan Stanley’s prediction that this company’s going to do $3.4 trillion in revenue and $2.7 trillion in EBIDTA by 2040, for example. I’ve also got to concede that while I’m not fond of Elon Musk, SpaceX has done things that are so mind-boggling that they’ve literally made my jaw drop.
It’s going to be fascinating to see how all this unfolds – can SpaceX live up to the hype and reach “To Infinity and Beyond!” – or will the aftermarket be a major buzzkill? Stay tuned.
I highlighted one of the significant governance concerns about SpaceX in today’s lead blog, and there are plenty more where that came from. Since that’s the case, it’s not surprising to see that The CII & a group of mostly public-sector investors have submitted their customary objections to the governance practices of the latest hot dual class IPO.
Those objections notwithstanding, we’ve also come to expect that most institutional investors will stick to their strategy of “buy now, whine later” when it comes to hot issues. In the case of SpaceX, the WSJ reported yesterday that BlackRock lobbed in a $5 billion order, and that other big investors were likely to follow suit, so it appears that there aren’t going to be many major institutions growing a spine this time around either.
I’m also eagerly awaiting the inevitable next stage – complaints that regulators or stock exchanges need to ride to the rescue of institutional investors, who despite sitting on the world’s largest pile of money, say they’re incapable of doing anything about offerings whose governance provisions they find objectionable.
I guess I’m somewhat sympathetic to the index funds that will be forced to buy SpaceX shortly after the IPO, although because most buy based on float-adjusted market cap, even this humungous offering isn’t going to result in any index fund holding enormous quantities of SpaceX stock, at least at first.
As for the rest of you guys, if you don’t like Elon or SpaceX’s governance, either don’t buy the stock or buy it and plan on playing the long game. After all, there’s evidence that investors can sometimes wear these dual class founders down. Don’t think that will work with SpaceX? Then see option 1.
If you watched Game 4 of the NBA Finals on Wednesday night, you witnessed one of the most improbable comebacks in NBA history. Now, even I can’t come up with the slightest connection between The Wu-Tang Clan’s halftime show and the securities laws, but I’m going to blog about their impact on the game anyway.
It’s apparent that not only did the guys wow the Garden with their halftime performance, but they channeled their inner Knute Rocknes to provide second half inspiration for the Knicks as well. Don’t take my word for it – here’s how yesterday’s New York Times summed up The Wu-Tang Clan’s performance:
Stat of the game: Wu-Tang finished plus-28 on the night.
Some fans are attributing the Knicks’ win to Taylor Swift. I’ll let our resident Swiftie Dave Lynn make that argument if he wants, but I know what I saw. Now if I can just figure out a way to get them to show up at a Cleveland Browns game. Have a great weekend, everybody!
The WSJ reported earlier this week that predictions market operator Kalshi is tightening its security measures and asking some traders to identify their employers in response to concerns about insider trading. This Sidley blog says that it’s time for public to tweak their own insider trading policies to address the issues presented by prediction markets, and for other organizations to implement formal policies of their own. This excerpt explains the rationale for that position:
Historically, insider trading compliance programs were implemented only at publicly traded companies and focused primarily on securities transactions involving publicly traded stock. Because the use of online prediction markets is a relatively new phenomenon, those programs have not explicitly addressed prediction market activity.
In addition, prediction market trading may involve contracts unrelated to publicly traded securities and may implicate confidential information held by private companies, nonprofits, universities, healthcare systems, government contractors, and other organizations that historically may not have maintained formal insider trading policies. As a result, employees and other personnel at public or private companies may incorrectly assume that existing restrictions on the misuse of confidential or proprietary information do not apply to prediction market activity, creating potential ambiguity and increased compliance risk for organizations.
The blog goes on to make specific recommendations for actions that public companies and other organizations should take to appropriately update existing insider trading policies or to include in newly adopted policies to address prediction markets.
