By Paul R. La Monica

Whirlpool stock continues to go down the drain, and David Tepper of Appaloosa Management, the company's third-largest investor, isn't happy. He's joining the growing list of prominent activists pressuring underperforming companies to get their financial house in order.

Tepper sent a strongly worded letter to Whirlpool management Wednesday, arguing that the company's decision to issue more stock "resulted in a large, unnecessary dilution of shareholders." Shares plunged 14% Tuesday on the news of Whirlpool's $963 million offering, and have tumbled more than 30% over the past year.

Whirlpool isn't the only major company that has come under attack from activist investors. Norwegian Cruise Line Holdings and Tripadvisor are in the crosshairs of Paul Singer's Elliott Management and Jeff Smith's Starboard Value, respectively.

In fact, activist shareholders have been having a field day lately. According to a report from Barclays, there were 255 activist campaigns announced last year, a new all-time high.

"The resurgence of M&A and equity market volatility created favorable conditions for activism," said Jim Rossman, global head of shareholder advisory for Barclays, in the report. KeyCorp, Barrick, Lululemon, and Keurig Dr Pepper were also notable activist targets towards the end of 2025, he added.

But with the trend likely to continue this year, regular investors should be wary. After all, activists often target weaker companies in need of change.

Activist investors have also targeted underperforming stocks overseas. The CEOs of U.K.-based oil giant BP and British consumer products conglomerate Unilever were both forced out last year after pressure from Elliott and Nelson Peltz's Trian, respectively. (Elliott was the most active activist, if you will, launching 18 campaigns last year, according to Barclays). And just this year, Japanese toilet maker Toto has come under pressure from activist firm Palliser Capital to focus more on its ceramics business, a key supplier of components to semiconductor equipment firms.

But investors may want to think twice before buying a stock that's come under fire from activists. Researchers at the Harvard Law School Forum on Corporate Governance pointed out in a report last April that stocks often trail the broader market once activists get what they want.

The Harvard team found that about 60% of the 634 companies they looked at between 2010 and the end of 2024 underperformed the market after activists settled with a company. And the average lag behind the market was nearly 10%.

"Companies targeted by activists may have fundamental issues that drew the activist in the first place and remain post-settlement," the researchers said. "Another explanation is that settling with an activist and prioritizing their agenda in the boardroom is inherently disruptive, ultimately weighing down the company's performance."

The Harvard team added that "settlements do not generate benefits for investors with long-term investment horizons." But there is one notable exception: when activists successfully pressure a company to sell itself. Those stocks outperformed the market by more than 15%.

Still, that's a risky bet.

But what if an investor wants to follow the lead of activist investors? One possible approach is buying the stock when the agitator is first making noise and then selling if the target company finally gives in to an activist's demands. Investors in Whirlpool, Norwegian, Tripadvisor and other activist targets need to keep that in mind.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 25, 2026 14:03 ET (19:03 GMT)

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