Activist investor Jana Partners LLC just disclosed a new 8.3% stake in Whole Foods Market, Inc. WFM, and the news sent the grocery chain’s stock price skyrocketing on Monday.
Whole Foods’ stock closed up 9.98% to $34.17 per share on Monday. The company’s stock is also up marginally in after-hours trading, and the healthy grocery chain could be poised for even more gains as Jana Partners is reportedly looking to make some major changes.
The Austin, Texas-based natural foods giant has been losing shoppers for over a year, and now Jana Partners is looking to shake up Whole Foods’ board. More importantly, they hope to spur new money making strategies, which includes potentially selling the company.
The announcement of Jana Partners’ large Whole Foods stake comes after the health-food grocerystore posted its sixth straight quarter of same-store sales declines in February. Since February 2015, shares of Whole Foods have dropped by more than $20.
Jana Partners is now the second largest Whole Foods shareholder. In a regulatory filing Monday, the company said it thinks Whole Foods "shares are undervalued and represent an attractive investment opportunity."
The activist investor plans to look for ways to improve Whole Foods’ real estate, including the possibility of adding a small-store format.
In 2013, Jana Partners announced a 6% stake in Safeway that eventually helped led to a merger with Albertsons. In November, the company announced it had invested heavily in Twitter Inc. TWTR.
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