Quora Answer: Does Buying 1% or 0.1% of a Company Make Me an Activist Investor?

The following is my answer to a Quora question: “Does buying 1% or 0.1% of a company make me an activist investor?  Can it also help me to get on the board of directors?” 

Not even close.  An activist investor buys a significant stake in a public company in order to influence how the company is run.  For your stake to be considered significant, it needs to be at least 5%.  Then, you need to file as one with the relevant securities commission, where the company is listed.  Considering we are talking about listed companies, that 5% stake would be worth millions or billions.  

All that aside, holding 5% does not guarantee you a seat on the board.  There are limited seats on the board, and there are likely to be investor groups that hold much more than your 5%.  You will need much more than that to demand a seat on the board.