Time Inc. (NYSE: TIME) has a very long history in media, but it has also not been immune from the woes of many older media outfits in the new age of media. Now is the time to wonder just what an activist investor might be able to do for the company, or others like it.
The activist investor Jana Partners took a stake of 5 million shares as of June 30, 2016. The Jana Partners 13F filing with the U.S. Securities and Exchange Commission showed a stake of 4,999,929 shares worth $82.299 million as of June 30.
It is not really a shock that Time shares were up on the news. Its stock was last seen trading up 5.8% at $14.44, in a 52-week range of $12.23 to $22.12. Time’s market cap now is a mere $1.44 billion.
Investors still need to ask themselves what exactly they think Jana Partners thinks it can accomplish here. Maybe they just think the stock is cheap. Maybe the thought is that Time would be better being rolled back up into a larger partner. And maybe there is the hope for more asset sales.
The reason to ask is that close to 5 million shares and $82 million is just not a very large stake for a firm like Jana. The 13F filing showed that Jana has 20 positions worth over $100 million, and some of these are very large stakes in comparison. Its total holdings as of June 30 were $5.85 billion, so what will an $82 million stake really mean for Jana?
Thomson Reuters has a consensus analyst price target of $17.75 for Time, even without Jana’s influence. It is also important to consider that Time shares had hit $25 briefly in 2014 and 2015. Maybe there is more value that can be unlocked.
Activist investors often look at things quite differently than other investors. Sometimes they make a difference inside the company, and sometimes they just participate in a drive-by investing style without much actual involvement and effort.
The reality is that it is hard to know what might actually come from Jana’s involvement in Time. Stay tuned.