In this paper we study a model in which an activist shareholder has the possibility of disciplining management either through the exit mechanism or through direct intervention. We characterize equilibrium conditions under which each governance mechanism exists. The intervention (exit) equilibrium is more (less) likely to exist when the block size held by the activist is already almost big enough to be an effective toehold for exercising voice, when the activist is effective in restoring firm value, when the activist is less effective in punishing destructive behavior by the manager, and when the temptation for misbehavior by the management increases. We also show how existence and effectiveness of each type of governance mechanism is affected by liquidity shocks that force the activist to buy and liquidity shocks that force the activist to sell. Joint with Charles M. Kahn.