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Is This the End of Dollar Tree as We Know It?

Tags: fund hedge
DATE POSTED:January 11, 2019

Dollar Tree (NASDAQ: DLTR) has been struggling for years, weighed down by its 2015 acquisition of Family Dollar. That deal vastly expanded the number of stores it operated, but also changed the company's business model from selling all goods for $1 or less to one with a sliding scale of prices.

Activist investor Starboard Value thinks it's time to undo the mistake Dollar Tree made. First, it wants the company to sell the Family Dollar chain. But the hedge fund also suggests that it's time for Dollar Tree to break the dollar barrier and begin selling goods for higher prices. While there's some sense to the proposals, there is also a risk that they could do much more harm than good.

Image source: Getty Images.

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Tags: fund hedge