Carl Icahn exercises call options on Family Dollar stock

07/02/2014 6:32 PM

07/03/2014 7:40 AM

Activist investor Carl Icahn exercised call options on Wednesday to take ownership of the shares underlying his 9.4 percent stake in Matthews-based Family Dollar.

Icahn, who has called for Family Dollar to be sold and threatened to move to fire the board of directors, previously held most of his stake through options to buy stock rather than actual shares. That changed Wednesday, according to securities filings, when he exercised the options and purchased the underlying shares.

Family Dollar’s stock rose 1.3 percent Wednesday, to close at $65.79 a share.

Icahn spent a total of $622 million to acquire all of the almost 10.7 million shares he now owns, according to securities filings. At Wednesday’s closing price, the shares are worth about $703 million, meaning Icahn has already accumulated paper gains of $81 million.

Family Dollar’s shares have fallen from their high of almost $70 since Icahn announced his stake in the company. If the company’s shares returned to that price, Icahn’s stake would be worth $748 million, giving him a $126 million profit on paper.

Icahn has said the chain needs to be sold because it is under-performing its competitors.

Editor's Choice Videos

Join the Discussion

Charlotte Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Terms of Service