Bill Ackman lays out his case. I for one (and hopefully Target (TGT) shareholders do to) hope he wins some board seats and shakes things up over there. They are sleepwalking through this recession and getting pounded by Wal-Mart (WMT).
Pershing Square Letter to Target Shareholders
Disclosure (“none” means no position):Long WMT, none
7 replies on “Pershing’s Public Letter to Target Shareholders”
Honestly, both Target’s and Ackman’s criticisms seem to be right, in their own ways.
Although in this proxy Ackman does gloss over the fact that his “real estate” transaction basically is a pointless deal intended only to lift the stock price.
In the short term, shareholders will probably benefit most if they elect Ackman’s slate to the board.
But over the long term, it is likely that shareholders would be better off, say, only electing Ackman himself and maybe one other director, not swinging the board into his control.
Michael Ashner basically shouldn’t be on there, and he is not “independent” — he’s one of Ackman’s good friends. This is compared to getting rid of the CEO of Wells Fargo? Is Ackman joking?
ANON,
Bill has said several times recently that the RE deal does not makes sense “at this time” given what has happened to CRE since he proposed it
i do not think he realistically think he’ll sweep it. even just the CC guy or food guy could make a huge difference
I think his other directors look good — CC, food, and the law professor. And then Ackman himself makes sense. But I don’t think Ashner — despite being a great investor — is really on the same level as the others, not to mention his personal ties to Ackman.
But overall I think Ackman’s points are reasonable. His credit card plan is reasonable, as are some of his general ideas about improving operations. Ideally they can reach some kind of consensus; but I think the next shoe to drop, if he gains board control, is to oust Steinhafel and put in someone that he has more influence over.
yeah…all in all i think he is operating from a “lets go all in” on directors and reality is he’d be very happy getting a couple…
i have no facts on that. just an assumption
why was target managmeent buying stock back hand over fist at 50 and not touching it at 29? I question managements cpaital allocation views.
Ackman thought it was great that they were buying stock back at $50. What’s to question about the capital allocation views? — Ackman thought the company was undervalued enough at $50 to put the bulk of his cash there.
But Target isn’t in the business of predicting the direction of the economy or stock market, and given that we are in a depression, maybe the prudent decision is to retain a solid cash cushion?
the reit idea would preserve cash both in terms of raising it and lowering capex for target..