Bill Ackman's Target Campaign Makes Us Feel Dumb


Activist investor Bill Ackman is spending millions to get representation on the Target (TGT) board, as he hopes to revive the flagging retailer and make it newly competitive against Wal-Mart (WMT).

He told a “town-hall” meeting in Manhattan yesterday, that he’s pushing his slate of five nominees, purely because he thinks they could do better than the alternative, and that while there’s “a lot to like”, things could still be better optimised.

Writing at The Deal, former Target director, Bill George, said Ackman’s criticism is totally off the mark and that the board is a paragon of independence and discipline.

Ok, we’ll hold off on the debate, and we really don’t care much whether Ackman wins a place on the board.

But every time Ackman gets a media wave, we always come back to the same thought: Wait, this guy raised an entire fund just so that investors could buy a leveraged stake in one stock? Really?

It just boggles the mind. Why are people paying him fees, limiting their redemption abilities and handing over transaction timing to someone else for one single stock? It makes us feel stupid for not getting something.

What’s amazing, too, is that when he raised the fund, investors didn’t even know what stock he’d put them in.


So are we dumb (don’t answer that) or are Ackman’s investors dumb? Or is there something we’re just totally missing here.

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