Should Family Dollar (FDO) sell itself, as activist shareholder Carl Icahn wants it to do? And Harley-Davidson (HOG) unveils a prototype for an electric motorcycle, that’s much quieter than a typical Harley. Will riders go for it? Yahoo Finance Editor-in-Chief Aaron Task, Senior Columnist Michael Santoli and Breakout Host Jeff Macke weighed-in on both of those issues.
Icahn to Family Dollar: Sell yourself “immediately”
In a letter to the Securities and Exchange Commission, Carl Icahn told Family Dollar CEO Howard Levine, “it is imperative that Family Dollar be put up for sale immediately.” Icahn, who recently disclosed he owns 9.39% of the company, said that if the Family Dollar doesn't sell itself and elect three of his representatives to the board, he will ask the company's shareholders to vote out the entire board and elect new members. When Icahn disclosed his stake in the company on June 6th, the company adopted a poison pill, blocking investors from acquiring more than 10% of the company.
Macke said it’s difficult for Family Dollar to turn itself around when it’s focused on dealing with activists. Task agreed, saying it’s a huge distraction. “Now they are seen to be in-play, whether they should be in-play or not. And they’re not focusing on their core business,” he said.
The panel questioned who the potential buyers should be. Santoli said that Family Dollar is the worst performer in the dollar store space over the last one to two years, but he said merging with Dollar General (DG), the other major company in the industry, isn’t necessarily the solution. “I don’t know if a merger with Dollar General is a no-brainer on any side of it,” he says.
If Dollar General isn’t interested in buying Family Dollar, then Macke asked, “what’s your back-up plan?”
Task added, “If not Dollar General, who's the buyer? I think that’s the real question for Carl Icahn.”
A quieter hog?
The Harley-Davidson (HOG) of the future may not have the thunderous roar we're accustomed to. The company unveiled a battery-powered motorcycle yesterday, the efforts of a four-year project called LiveWire. The motorcycle is only a prototype and the company said it's at least two years away from rolling out. The motorcycle is an effort to reach a more urban and environmentally-conscious demographic.
Macke was skeptical about a quieter Harley, at least for its core audience. He called a Harley-Davidson, “an ostentatiously loud motorcycle that doesn’t really need to be.”
“There’s very much a, ‘Hey, look at me. I’m riding a Harley,' factor embedded in Harley’s marketing. So, I’m not sure how much of an appeal there’s going to be on this thing,” he said.
Santoli said experimenting with an electric motorcycle makes sense for Harley-Davidson to see if it's something that could work in the future. However, the motorcycle’s limited range between charges – just 100 miles – might not be appealing to some riders. He said one of the appealing things about a gas-powered motorcycle is that, “you can ride a really long time without stopping. They’re really fuel-efficient.”
Would you ride a quieter Harley-Davidson motorcycle? Would you ride a motorcycle with a shorter range than a gas motorcycle? Vote in our poll, or leave a comment below or on Twitter.