Target Corporation (NYSE: TGT) shares opened sharply higher amid a broad market rally on the Treasury’s new plan to buy up toxic assets. However, investors have another good reason to be happy after looking at a Form 4 filing with the SEC. Executive Officer Gregg Steinhafel purchased 150,000 shares on March 18th at an average price of $30.35 per share. However, is this a real sign of confidence or something else entirely?
Insider purchases have typically been a sign of confidence in the target company. However, there is some speculation that this and future purchases by insiders may be intended to acquire votes against Bill Ackman, who announced his proxy contest just a day earlier in a Schedule 13D filing with the SEC. The billionaire activist proposed his TIP REIT plan a few months ago, but met strong resistance from the board of directors.
Ackman nominated five individuals to the company’s board at Target’s 2009 annual meeting. The nominees include William Ackman, Michael Ashner, James Donald, Ronald Gibson, and Richard Vague. All of these nominees appear well qualified for the job, while Ackman’s plan, if instated, may be an effective way to unlock value in the depressed retailer. Either way, this is definitely a situation worth watching for shareholders and investors!
Related Companies
Wal-Mart Stores, Inc. (WMT)
Costco Wholesale Corporation (COST)
Dollar Tree, Inc. (DLTR)