Glenn Alperin

Ackman and Target: Another Battle Brewing

HardwoodFlooring, given the market downfall recently, can you blame Ackman? He's just trying to cash in while the share price is relatively low, like any stock trader, so he can sell when the share price goes high again.

I supported his proxy fight battle. (See my previous article about Target on SeekingAlpha here: seekingalpha.com/artic... ) Granted, it would have failed miserably in light of the recent economic mess we are in now, but all the more reason he should go with the REIT idea now. (No pun intended.) Real estate has practically bottomed out. Recent economic trends I have read suggest that a recovery will be slow, but it will occur, at least on a commercial level. Consumers can forget about any recovery until there is sufficient economic incentive for them to go out and buy (I believe the words for that is "economically sustainable jobs", which is an interesting dialectic given Wall Street's pension for clapping every time people are laid off of work, and rewarding companies only for bottom line profits at the expense of future economic gains from a sustainable consumer base), but commercial real estate is likely to come back a little sooner.

So a REIT would have been a bad idea at its inception, but we only know that given recent economic trends. I still think it would be a good idea NOW, where the commercial real estate market is likely to be headed on the upswing sooner than the consumer real estate market will.

Ackman Aims at Target's Bulls Eye: Right on Time

Larry, the idea of the walkie-talkies is to make the shopping experience for guests more pleasant. I'm sorry they were turned up louder than perhaps they should have been. Outside, when pushing carts, I had to turn mine up obnoxiously loud to hear anything, but inside, I had it turned up to about half that volume. I found them very useful as a team member, and I know that most guests appreciated the fact that they could get quick answers to questions if the person they were asking was unable to provide the answer right away.

But you are right about one thing: Most of the employees really don't care. That was my chief frustration with working there. One can ask why they don't care, and I think the answer is because Target ultimately doesn't care about them either. Corporate caring goes both ways. If Target would care about its employees, perhaps its employees would care more about it. Coincidentally, Walmart is not much better in this regard. Both companies make huge profits by paying their employees wages which they are unable to achieve long-term economic stability.

As for merchandise, its a bit of a corporate myth that Target and Walmart are competitors. Walmart seeks out a clientele of a slightly lower socio-economic scale. "Always low prices" is great marketing for people with fewer dollars in their pocket. I've rarely set foot in a Walmart store, but when I have, the merchandise has been fairly comparable even if the presentation of that merchandise was a bit different. Different geographic locations will have different merchandise (how many pair of snow skis do you think they sell in Florida, for example?) and different store locations will require being in tune with the economics and social issues of the area the store is built in.

User, I agree with you too, but that is precisely why I think NOW is the time for Ackman to take charge, and why a year ago, I was NOT convinced of Ackman's ideas. Real estate has tanked to historic lows. Now would be the time to invest in it. As far as demographic migration, do you think corporations don't look at that when deciding where to build stores? Do you think Ackman, as a profit-driven investor, isn't aware of these details? I think Ackman is very much aware of the intrinsic value of Target, and he wants to make that intrinsic value greater. I think now would be the perfect time to give him that chance.

One thing I like about Ackman, while sometimes being frustrated with it, is his proposing of "solutions" to companies which appear to have put their head in the sand. He doesn't always win his fights, but the fact that he voices his concerns is usually enough to get corporations to take a serious look at his motivations, which on the whole they are usually in agreement with even if they differ on strategy for achieving it. Given that he himself is an investor, its not hard to see where those motivations lie.

$6M Suit: Target, Amazon Must Make Web More Accessible to Blind

Let's be honest here. For those who are not blind or deaf, having such disabilities is very socially challenging, at best, and can have very serious consequences if people do not take such matters into account. Imagine dispensing medication to a person who is blind. This is a real world problem with real world consequences which has actually already been solved. Such solutions for a website are even easier (speaking as a web developer myself) and easily should have been a high priority on ANYBODY'S website design list. My personal website is accessible, and there shouldn't be any website out there designed for public viewing which isn't.

Jala, deaf people CAN enjoy radio, especially talk radio and news reports, which is the whole point of having transcripts available. They can even enjoy music, though in a very different way from the rest of us.

Honestly, Target, with it's community focus efforts, really should have known better. Somebody at Target really dropped the ball by approving the Amazon website without due consideration. Somebody, and I don't know who, really screwed up, and at the very least, should lose their own job over it. Target has better things to do with its money than lose lawsuits over stupid easily preventable mistakes. As both a shareholder and a person who cares deeply about disability issues, I would expect better from Target.

When Buybacks Are Bad

I really don't understand the logic about why stock options are supposed to be good for a company. I understand that it makes it more attractive to keep supposedly qualified and profit-driven executives, but since when should those executives get to keep the milk money from a cash cow when they are not rewarding their employees adequately for a job well done? I worked in retail for about 7 years, and if management didn't have us underlings to actually do the grunt work, there is no way the companies I worked for would have made the money they made to be able to afford to pay the management at the top so excessively, whether that is in cash or stock options. I'm all in favor of returning that money to the stock holders by way of dividends, but here is an even better idea? Why not return it to the hourly employees who worked their butts off in the first place? It sure would be a marvelous tool for keeping at bay one of the biggest expenses in running a retail business: employee turnover.

Right. Time to get my head out of my ass again and return to reality. Management doesn't care about employees as anything other than a line which they would prefer to be dispensable on the expense reports. For the most part, they don't care about their stockholders either. I wish you luck trying to change the corporate culture of such companies. You'll need it.

Bill Ackman's Brutal Target Losses

I'm always skeptical of investors, even those with deep pockets like Ackman, who invest in companies with the sole purpose of trying to change the business model of companies they invest in. Even if the goal of creating greater long-term profit (and presumably greater shareholder value) is there, why do investors like Ackman think they know more about a company than the company executives?

Having said that, in hindsight, it seems clear that Ackman must have had some inkling of an idea that the credit bubble was about to pop since he had suggested that Target should sell its credit card business as soon as his stake in Target was made public. Target subsequently has sold off at least a portion of it, and probably received a much lower value for doing so than if Target had originally followed suit at the time Ackman had offered the suggestion.

So, was Ackman brilliant (despite current losses), or was Target stupid, or was it something else completely?