NEW YORK (AP) -- Shares of Jos. A. Bank Clothiers Inc. jumped Tuesday after BeaconLight Capital LLC said the men's clothing chain's stock is undervalued and publicly urged for changes at the company.
THE SPARK: BeaconLight and its affiliates delivered an open letter to Jos. A. Bank on Tuesday, saying that board failures and company policy have trapped the true value of the business inside the company.
The investment firm urged other shareholders to demand change at the company, such as reshaping of its board.
A representative from Jos. A. Bank could not be reached immediately for comment.
THE BIG PICTURE: BeaconLight made a number of complaints, saying that the company has underperformed its peers, delivered dismal shareholder returns and that its board has "total disregard" for shareholders. It also accused the company of making limited and misleading communication with shareholders. It said the company's decision to hold on to cash for acquisitions is the last straw.
Jos. A. Bank said in late June that it is looking for potential acquisitions and that an investment firm is assisting in the process, but set no time table for completion.
BeaconLight argues that Jos. A. Bank still has strong underlying value and the best path the company can take is to repurchase shares at today's stock price, which would increase the value of its remaining shares. It also suggested changes to the board, updating its compensation practices, end a consulting agreement and building a "legitimate" investor relations department.
The firm and its affiliates own more than 1 percent of Jos. A. Bank's shares.
Jos. A. Bank reported in June that its fiscal first-quarter net income fell 45 percent as cooler weather and lower prices hurt the retailer's performance.
SHARE ACTION: Shares of the retailer jumped $3.03, or 7.5 percent, to $43.33.
Jos. A. Bank's stock is quite volatile. While its stock is trading near where it did during mid-August of last year, it has hit as high as $50.75 and as low as $37.31 in the past 52 weeks.
- Investment & Company Information