What Is Corporate Raiding?

What Is Corporate Raiding?
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  1. In business, a corporate raid is the mechanism of buying a large stake in a corporation to make profit and then using shareholder voting rights to require the company to undertake novel measures designed to increase the share value, generally in opposition to the desires and practices of the corporation’s current management. It involves a corporate raider, who is an investor that buys a large number of shares in a corporation whose assets comes out to be undervalued. The large share purchase would permit the corporate raider significant voting rights, which could then be used to bring some changes in the company’s leadership and management. So basically raiding generally occurs when the company’s share price has recently fallen significantly. It is also called venture arbitrage.

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