Is there a risk of a proxy contest or board reconstitution that could impact the stock’s short‑term volatility?

Yes – there is a non‑trivial risk of a proxy‑contest‑driven board re‑constitution that could add short‑term volatility to AVTR.

Engine Capital, a well‑known activist investor, now holds roughly 3 % of Avantor’s float and has formally mailed the board a governance‑improvement letter. While Engine has not yet filed a proxy‑contest or a formal nomination slate, the move signals the start of an activist campaign. In similar cases, activists first publish a “letter to the board” and then follow up with proxy‑filings, shareholder‑meeting proposals, or a bid for board seats. The market therefore tends to price in the probability of a contested proxy battle, which can trigger heightened trading volumes and bid‑ask spreads as investors re‑price the potential for board turnover, strategic shifts, or even a tender‑offer.

Trading implications:

- Short‑term bias: Expect a modest‑to‑moderate uptick in volatility over the next 2‑4 weeks as Avantor’s proxy‑filing deadline (typically in early‑May for a June annual meeting) approaches and any subsequent shareholder‑meeting actions are disclosed.

- Positioning: If you are long, consider tightening stops or trimming exposure to protect against a volatility‑driven pull‑back; if you are neutral or short, a modest‑size “vol‑play” (e.g., buying AVTR options with a short‑dated straddle or buying the stock on a dip) could capture the upside of the volatility spike.

- Watch‑list: Monitor SEC Form DEF 14A filings, any subsequent proxy‑statement releases from Engine Capital, and the company’s response (e.g., board‑reconstitution announcements). A confirmed proxy contest or board‑re‑constitution filing would likely amplify the volatility signal and could justify a more aggressive tactical trade.