Bill Ackman still aiming at Target

Activist investor William Ackman has been trying to get Target (TGT) management to take action to increase its share price, and he has been at if for over a year. According to The Wall Street Journal, he plans to try to replace some of the company's board using his 7.8 percent stake in the firm as leverage. The paper reports that Ackman said, "We want directors with relevant expertise, who can draw from their personal experience when the board has a decision to make." That probably means directors who will vote based on Ackman's interests.

Ackman has been burned as Target's stock has dropped, but the company has a reasonable case when asking shareholders to ignore him. Over the last year, Target's stock has not done any worse than the Dow and has done much better than most retail stocks. In other words, in a world where the retail industry is falling apart, Target has not been a bad bet for investors in the sector.

It is hard to say what Ackman wants to do if he is successful at getting seats on the board. He has talked about selling some of Target's real estate, but with land selling at depressed prices, that may not be a good move. He could pressure more store closings. That may help the company short-term, but as the economy recovers, Target could loss valuable market share.

Ackman does not have much in the way of a plan to take Target down a path other than the one it has already taken.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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