Now, If you are a shareholder, where are you going to go. Think about it. Target (TGT) management has already said they do not feel any changes are necessary and they "just need to manage through the downturn". OR, will you go see what the guy who has successfully implemented changes at McDonalds (MCD), Wendy's (WEN), Longs Drug (LDG)etc.. and, oh yeah, also happens to be the largest shareholder of Target?
It is a no-brainer....
Ackman really is stoking Target shareholders emotions in this letter by making the direct and unavoidable comparisons to Wal-Mart (WMT) in what has to be a painful step by step process for shareholders. He details the divergence of the two companies over the past year. It really is stunning..
He also says, "Despite the fact that Target's two principal business lines are retail and credit cards, Target currently has no independent directors with senior, executive-level experience in these two businesses,".
The letter
Ackman's Letter to Target Shareholders <object codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" id="doc_445907735909488" name="doc_445907735909488" classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" align="middle" height="500" width="100%" rel="media:document" resource="http://d.scribd.com/ScribdViewer.swf?document_id=14024922&amp;access_key=key-1phat6kf0vmesgnxil40&amp;page=1&amp;version=1&amp;viewMode=" xmlns:media="http://search.yahoo.com/searchmonkey/media/" xmlns:dc="http://purl.org/dc/terms/"> <param name="movie" value="http://d.scribd.com/ScribdViewer.swf?document_id=14024922&amp;access_key=key-1phat6kf0vmesgnxil40&amp;page=1&amp;version=1&amp;viewMode="> <param name="quality" value="high"> <param name="play" value="true"> <param name="loop" value="true"> <param name="scale" value="showall"> <param name="wmode" value="opaque"> <param name="devicefont" value="false"> <param name="bgcolor" value="#ffffff"> <param name="menu" value="true"> <param name="allowFullScreen" value="true"> <param name="allowScriptAccess" value="always"> <param name="salign" value=""> <embed src="http://d.scribd.com/ScribdViewer.swf?document_id=14024922&amp;access_key=key-1phat6kf0vmesgnxil40&amp;page=1&amp;version=1&amp;viewMode=" quality="high" pluginspage="http://www.macromedia.com/go/getflashplayer" play="true" loop="true" scale="showall" wmode="opaque" devicefont="false" bgcolor="#ffffff" name="doc_445907735909488_object" menu="true" allowfullscreen="true" allowscriptaccess="always" salign="" type="application/x-shockwave-flash" align="middle" height="500" width="100%"></embed> Ackman's Letter to Target Shareholders todd sullivan A classic </object>
Target responded to the letter saying:
The company said, "We believe that the current Target Board has the strength, diversity, experience and qualifications to provide effective and independent oversight and direction to the company. Target's Board consists of highly qualified directors, all but one of whom are independent. Each member of Target's Board is committed to delivering superior results and serving the best interests of all Target shareholders."
Yeah, ok, thanks for that. Where is Ackman speaking again?
I have said from day on this issue that the folks at Target are not doing themselves any favors by keeping Ackman on the outside and summarily rejecting all of his proposals. Some folks just gotta learn the hard way I guess.
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Disclosure ("none" means no position):Long MCD, WMT, None
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