Observing that
stock prices rose dramatically when owner - managers of «Wall Street's orphaned stars» decided to sell, and outside investors were «typically a diffuse bunch in no position to put heat on the controlling insiders,» activist investors saw the obvious value proposition and path to a catalyst and entered the fray.
Example: You decide to contribute $ 10,000 during an offering period and that turns out to be a good choice:
the stock price rises dramatically, and because of a lookback provision you're able to buy $ 25,000 worth of stock, giving you a $ 15,000 benefit.