The giant retailer’s pains continue after major shareholder William Ackman said he might sell his 18% stake. Now it’s time for a poison pill:
The rights plan, also known as a poison pill, is designed to dilute the value of a stock by flooding the market with additional shares, making it expensive for an investor to acquire a controlling stake.
Penney said the poison pill, which is in effect for one year, wasn’t adopted in response to any particular effort to acquire control of the company, though the move comes just after Mr. Ackman, a hedge-fund manager who owns 18% of the company, said he could sell his stock.
I’m not sure I’ve ever seen a retailer chase away its customers so aggressively as Penney did under former Apple retail honcho Ron Johnson. Imagine if Amazon paid bonuses to UPS guys for punching you in the face when you answered the door. That’s pretty much what Johnson did during his brief stint as CEO.