Alon Brav and his colleagues at Duke University show that when the average activist investor announces they have taken a substantial position, the stock jumps 7%. This suggests that between identifying underpriced companies and improving those companies post-purchase, the typical activist adds 7% to value. But, is the whole 7% due to activism? Or did the manager find an underpriced company? Or is it 50-50 split of the two activism and underpricing each contributing 3.5%? 

What do you think is correct?