ANALYSIS: Activists Will Target Communications Companies in 2023

Investor activists have been busy this year launching campaigns to address supply chain disruptions and international conflicts. And while that activity will likely continue, the communications sector is the area to watch for investor activism activity for the remainder of the year and into 2023, in part due to changes brewing in the sector.

Investors have launched 48 campaigns against communications companies so far this year, including Netflix Inc., Pinterest Inc., and Buzzfeed Inc., according to Bloomberg data.

This year’s counts already surpass counts from three of the last five years, but 2022 is far from over. In 2019—which saw the greatest number of campaigns in the last five years—activists launched three campaigns in December. And December 2020 saw even more investor activist activity, with six campaigns launched against communications sector companies. Based on these numbers, 2022 investor activism campaign counts in this sector are likely to exceed 2019 levels by the year’s end.

Next Year’s Growth

Future growth in investor activism campaigns targeting communications sector companies will likely be attributable to the internet and media services industry. Year to date, over a third of communications sector investor activism campaigns were launched against internet media and services companies, and they’ve been rising steadily since 2017.

Upcoming changes to the legal landscape for internet media and services companies will keep this momentum going next year. As forecasted by Bloomberg Law legal analyst Golriz Chrostowski, social media platforms will likely face increased scrutiny in 2023, as the broad immunity from legal claims that they’ve enjoyed under §230 of the Communications Decency Act could be reined in. In this scenario—where the industry is potentially more vulnerable—investors may feel emboldened to target product safety in their campaigns against internet media and services companies.

Investors may also launch objectives that seek to infuse communications companies’ policies and practices with their values—and extreme cases could even result in acquisitions, as was the case with Elon Musk and Twitter Inc.

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