A company whose shareholder base is dominated by short-term investors can’t focus on strategic decisions, according to a new study undertaken by Stanford Business.
The study was conducted by Stanford Business in partnership with the National Investor Relations Institute by surveying 138 investor relations professionals at North American companies to ascertain the impact that shareholder base can have on corporate decision making.
Companies prefer long-term investors
According to the study, companies are most likely to describe their ideal shareholder as having a ‘long-term investment horizon’. On average, companies anticipate the investment horizon of a typical long-term investor to be at least 2.8 years. By contrast, short-term investors are seen as having an investment horizon of 7 months or less.
As revealed by...
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