> a handful of hedge funds own a majority of the shares
> institutional investors
Hedge funds are a minority of institutional investors. Most of those institutional investors are companies like Vanguard or BlackRock, who in turn just hold shares on behalf of their customers; basically, anyone who contributes to a 401k with a "Vanguard Target Retirement 2060 Fund" or whatever.
> If those hedge funds all decide they're unhappy with the "rich CEO's" decision, they can dump the shares all at once, it will tank the price, and the CEO's are no longer rich.
This is true, but the funds will also lose money (or miss out on gains in the future). Activist investors like Elliott absolutely do exist, but most AUM is managed by non-activist investors. Elliott, for example, had $71B in AUM as of last year; Vanguard alone was over 100x the size in that same year.
> institutional investors
Hedge funds are a minority of institutional investors. Most of those institutional investors are companies like Vanguard or BlackRock, who in turn just hold shares on behalf of their customers; basically, anyone who contributes to a 401k with a "Vanguard Target Retirement 2060 Fund" or whatever.
> If those hedge funds all decide they're unhappy with the "rich CEO's" decision, they can dump the shares all at once, it will tank the price, and the CEO's are no longer rich.
This is true, but the funds will also lose money (or miss out on gains in the future). Activist investors like Elliott absolutely do exist, but most AUM is managed by non-activist investors. Elliott, for example, had $71B in AUM as of last year; Vanguard alone was over 100x the size in that same year.