business news in context, analysis with attitude

CNBC reports that Supervalu “is facing escalating pressure from an activist investor. Blackwells Capital, which owns a little less than 4 percent of Supervalu's common stock and is one of the company's 10 largest shareholders, issued a letter Thursday morning calling out a ‘lack of clear steps’ at the company.”

According to the story, “The four initiatives Blackwells has suggested Supervalu consider include selling some of the grocer's more than 17 million square feet of owned real estate, which is ‘worth multiples of the current capitalization of the Company’ … The activist investor is asking Supervalu to sell roughly 30 percent of its stores, and to use the remaining locations for completing tasks like home delivery and meal prep.”
KC's View:
The problem is that activist investors often create an itch that must be scratched, even if it isn’t in the company’s strategic, long-term best interests. Investors just want to goose the stock price so they can sell it sooner for maximum gain.