Who says activist investors are dead, swallowed whole by the relentless passive, ETF wave?
Moments ago Whole Foods, which has seen its stock suffer a painful decline for the past two years, spiked on a WSJ report that Barry Rosenstein's Jana Partners has amassed a 9% stake in WFM and is pushing the organic grocer to speed up its turnaround efforts while also exploring a possible sale.
WSJ - Jana - Foods - Shareholder - Chain
According to the WSJ, Jana, which is Whole Foods’ second-largest shareholder, plans to press the chain "to improve its technology and operations" to better compete with larger rivals, shake up its board and find out how much a potential bidder might be willing to pay, according to people familiar with the matter."
Because, the thinking goes, management never thought of that before.
Jana - Campaign - Result - Stock - Sliding
And while Jana’s campaign is simply the result of the stock sliding (leading to unhappy LPs), forcing the activist investor to scramble and boost the flailing share price, the truth is that Whole Foods has struggled to make the transition from high-flying upstart with a loyal following into a large, national chain with the kind of back-office systems tracking customers and inventory that rivals use to keep costs down and sales up.
Whole Foods’ stock has risen 4% over the past 12 months, compared with a 15% gain in the S&P 500, and has lost more than half its value since peaking in 2013. Sales have fallen over the past 18 months. Same-store sales fell 2.5% during its fiscal year that ended in September 2016. The company’s market value currently stands at around $10 billion.
Details - WSJ
Some more details from the WSJ:
Jana has lined up a potential slate of board nominees, the people said, four months before the deadline to launch a board fight. That’s likely a signal that Jana, which has quietly reached settlements with several...
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