Hedge Fund Seeks Board Seats
An activist hedge fund manager, William Ackman, is currently in discussions with Target Corp. about appointing potential directors to the company’s board. This news comes from a recent Securities and Exchange Commission filing. Target shares saw an increase of 61 cents, or 2.2 percent, reaching $28.43 in aftermarket electronic trading. This positive movement followed a gain of 23 cents during the regular session, closing at $27.82. Target stock has experienced a significant drop in value, decreasing by half since peaking at $59.55 in September before the market downturn.
Amidst a scenario of reduced consumer spending, Target Corp. has struggled while other discount chains, particularly Walmart, have shown better performance. Walmart focuses on providing low-priced essentials, while Target has emphasized a cheap-chic assortment, specializing in discretionary items like clothing and home decor. Last Tuesday, Target reported a 41 percent decline in fourth-quarter profit.
Ackman has not disclosed the exact number or names of the potential board nominees. He mentioned a possibility of Pershing Square Capital Management LP, his hedge fund, either increasing or decreasing its stake in the company, depending on the outcome of discussions and other circumstances. In the filing, Ackman stated his ongoing belief in the underlying investment case for Target, viewing the current stock as undervalued. Ackman holds 58.4 million Target shares through his fund, representing a 7.8 percent ownership stake in the company, based out of Minneapolis, Minnesota. Ackman has also sold a number of call options related to Target’s common stock this month, having previously held a 9.7 percent stake in the company in early February.