Wall Street's New Raiders

At Blockbuster, for instance, Icahn tried desperately to get the company to acquire Hollywood Entertainment before the battle was lost to Movie Gallery(MOVI). His famous bluster continued even after the setback as he won three seats on Blockbuster's board and remained a big holder of Movie Gallery. Still, the travails show that even the game's best players face daunting headwinds.

"There is a flurry of 13D filings, and the stock goes up. But over time, the management has the ability to say, 'I don't care, I don't agree,'" says the head of a large fund of funds. "It's very rare when you get a Kmart/Sears."

Still, when an activist succeeds, the payoff can be enormous, both in terms of money and influence on corporate governance everywhere. Investors who bought Kmart when it came out of bankruptcy in 2003 have seen the value of their investment rise by a factor of seven.

Activist triumphs create a "halo effect" in the market, says McConnell, as executives at other potential targets start to worry about their own performance. Add to the equation the success of Lampert in business-building, and yesterday's barbarians start to seem a lot less savage.

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